Ready to start underwriting investment deals? Get our latest underwriting models here: www.tylercauble.com/models
@davidmurff5402 жыл бұрын
Would this spreadsheet be useful for small multifamily (5+ units?) OR syndicated deals only?
@TylerCauble2 жыл бұрын
Yes - I would use the multifamily model we have since it’s specifically built for that use
@Destroyer-vd8rl2 жыл бұрын
Hey Tyler. When you underwrite deals, do you then do it before signing the purchase contract and going into escrow, or after?
@genzoutdoor2346 ай бұрын
Hi Tyler, great video. Been studying a lot and it is easy to understand this whole spreadsheet. You do a great job explaining. My misunderstanding comes with the cap rate. Why is it when you take it from an 8% to 7% the value goes up? Aren't you basically saying the property only makes 7% income compared to value as opposed to 8%? Wouldn't 8% be a higher percentage of income? Thanks for your time in advanced.
@TylerCauble6 ай бұрын
Glad you liked it! Yes - if the cap rate goes down, that means that overall you're making less of a return off the same amount of cash flow because the price of the property is higher. Here's an example: $100,000 NOI on a $1,000,000 sale price = 10% cap rate $100,000 NOI on a $900,000 sale price = 11.1% cap rate Same cash flow but the different prices give you different cap rates
@bethel21433 жыл бұрын
What are your thoughts about CCIM or Appraisal Institute spreadsheets?
@TylerCauble3 жыл бұрын
I think the CCIM spreadsheets are great - that’s where I got my start with underwriting. They helped me get a grasp around what’s going on, but we now create our own spreadsheets for deals because there can be so many little nuances that just aren’t taken into account with some models
@TylerCauble3 жыл бұрын
Have any questions about underwriting commercial deals? Ask away!
@jondaley10943 жыл бұрын
Hey Tyler love the videos man i have a question: Do you need proof of income when under writing on a property? Even when you calculated that the property will cover the NOI?
@TylerCauble3 жыл бұрын
Thank you! I appreciate that. Do you mean proof of income for yourself as in you're applying for a loan from a bank or do you mean tax returns and proof of income from the property?
@jondaley10943 жыл бұрын
@@TylerCauble Right what I meant to say was do I need to show proof of income for myself when applying for a loan from a Bank for a property ? And also on a loan that is owed on the property?
@TylerCauble3 жыл бұрын
@@jondaley1094 Yes, you will. The lenders I have worked with have required 2 or 3 years of tax returns and a personal financial statement. Usually that will be sufficient for a commercial loan, depending on the type of property you're acquiring. The loan that is owed on the property will be paid off at closing by the seller, but that should be addressed in your purchase & sale agreement, just in case.
@tiffanyrodriquez84603 жыл бұрын
Not necessarily an underwriting question, but I'm curious if you think it would be lucrative to build a firm of CRE-focused marketers and lawyers to support/contract with developers in the development process. The idea is to provide sophisticated integrated marketing plans + legal protection, working as fractional legal and marketing teams. Would you hire that firm? Appreciate your advice! -Tiffany
@40EntrepreneurDrive3 жыл бұрын
1. I never realized that "underwriting" was something that an individual could/should do before investing. 2. I learned a lot in terms of what to include in my financing needs BEFORE asking the bank for money. I'm completely new to this industry. Looking to purchase a property as an owner occupied buyer while leasing out the extra space. I hadn't thought about including the rehab costs beforehand (I know, nube thinking) so thanks for making such an informative and thought provoking video.
@TylerCauble3 жыл бұрын
Absolutely! Glad the video helped with your understand those pieces. Definitely want to make sure you’ve got enough capital set aside for everything when you’re getting into a project. I’ve seen too many investors dive into a project and run out of funds because of that!
@cohenkeller5064 Жыл бұрын
How can I study REI/Syndication terms? There’s a lot of words/phrases I need to learn.
@TylerCauble Жыл бұрын
Bruce Petersen's book, Syndicating is a B*tch is a good one. We have plenty of blog posts at www.tylercauble.com/blog that walk through terms, as well. Best way is to listen to podcasts on the topic and read commercial real estate books. But it definitely is its own language!
@Mdg949 Жыл бұрын
Does your program include SFR underwriting?
@TylerCauble Жыл бұрын
It does not - I do have an SFH construction model but we don't do any investing in SFH
@fernandomejia15262 жыл бұрын
Just purchased the bundle package. Been listening to many of the videos. Do you have a program where you would walk us through one of ours? I would pay for that just to get hands-on experience.
@TylerCauble2 жыл бұрын
Glad to hear it! Sure - I'd be happy to walk you through the packets. I have a few videos on my channel about them, but if that isn't enough, you're welcome to book a time with me here: www.calendly.com/tylercauble/30min
@reinvestorshow Жыл бұрын
3.9% interest - maaaan lol
@TylerCauble Жыл бұрын
I miss those days 😂
@nickruffini54055 ай бұрын
Is this Google Sheet available somewhere?
@TylerCauble5 ай бұрын
Yes it is - you can find it here: www.Tylercauble.com/resources
@nickruffini54055 ай бұрын
@@TylerCauble Thanks. I saw that it’s an excel download so I’m assuming you just import into google sheets. I was thinking it was a separate download.
@mohammedrahman49053 жыл бұрын
Tyler this content is so helpful - even though CRE is a niche community in the KZbin sphere, your content resonates strongly!
@TylerCauble3 жыл бұрын
Thank you, Mohammed! Glad you’re finding value in it all 🙌🏼
@Katvannag3 жыл бұрын
Great channel Tyler!! Keep videos coming. Learning so much.
@TylerCauble3 жыл бұрын
That’s great to hear, Brendan! We’ll keep ‘em coming 🤙🏼
@warhammerfaction Жыл бұрын
Still selling this excel?
@TylerCauble Жыл бұрын
Yep - it’s still available at www.tylercauble.com/resources
@rahul848 Жыл бұрын
can u share the excel ?
@TylerCauble Жыл бұрын
Yes - you can get it here: www.tylercauble.com/resources
@mnventuresinc.82922 жыл бұрын
Just purchased a Bundle Package and these Tools will definitely help me be successful on my first deal here pretty soon. The next step is to talk to brokers in the area I would like to invest in as well. Looking for a discounted, value add multifamily and/or small commercial shopping center in Southern California. Great Content, Tyler!
@TylerCauble2 жыл бұрын
Love to hear that! Let me know how we can continue to support you
@fernie9882 жыл бұрын
So how is it going
@ericmobley32669 күн бұрын
How did you come out?
@christopherjuntura44393 жыл бұрын
Mic volume is super low.
@TylerCauble3 жыл бұрын
Got it fixed on the next video - thanks for letting me know 🤙🏼
@user-xq5rp9fm1p2 жыл бұрын
I don't get it, so basically GP only gets $45k/year and $100k LPs only get $20k after 5 years...doesn't seem that fruitful??? What am I missing??? Thanks...
@TylerCauble2 жыл бұрын
Not sure which point of the video you're talking about, but a $20k return after 5 years would only be a 4% total return and the IRR would be next to nothing. Maybe you're thinking of the annualized cash on cash return which means they're averaging $20k in returns per year?
@Ricocase2 жыл бұрын
Inflation = 8% Interest = 5% > 13% break even. Why buy an IRR of 10%?
@TylerCauble2 жыл бұрын
If that were the case, then the majority of Americans would be losing significantly in the stock market, too. It's not actually a break even - inflation at 8% increases the value of the property, too, so you'd likely exceed that IRR when you sell the property if that was the case. You'll also be able to justify rent increases because most pricing goes up in an inflationary environment
@Ricocase2 жыл бұрын
@@TylerCauble unless wages increase to keep pace, is there an 'invisible limit' at which consumers will stop buying, e.g. cars, houses, food?
@TylerCauble2 жыл бұрын
I’m sure there is but I’m not enough of an economist to know what that is. Even in 2008, consumers were spending
@onehundreddoors57152 жыл бұрын
Thats an insanely oversimplified analysis that misinterprets IRR. It's about the time value of money @rx-pert. You can have the same IRR but have dramatically different profits on the same initial basis, with the only variable being when you receive the money over the course of the investment. IRR is pretty complex to figure. You should look it up.
@Ricocase2 жыл бұрын
@@onehundreddoors5715 😆 'dramatically different profits over the same initial basis' = word salad 🥗, which wasn't explained simply or with any #s. Just take L, admit the BS, and save yourself the $.
@ZachPierceRowe2 жыл бұрын
Great video! Consuming a lot of your content. CRE is very quiet on content.
@TylerCauble2 жыл бұрын
Glad you're enjoying it, Zach! That's why I decided to create it all - there was nothing out there when I first got started
@jyobaccio1 Жыл бұрын
@tyler cauble does your commercial calculator sheet show a 10 year hold and the increase in value based on rentvincreases, say 3% a year? does it automatically increase expenses ea year? does it have exit purchases with an exit cap rate? Also, I want to ask what crm you use to track property.
@TylerCauble Жыл бұрын
I believe I emailed you back - let me know if that was someone else and I'd be happy to get you an answer!
@carlcuesta21573 жыл бұрын
Really enjoyed this and glad you took the time to break it down. Underwriting is truly understanding a property
@TylerCauble3 жыл бұрын
Absolutely! Underwriting is so critical to making a strong investment
@stevenwelch12312 жыл бұрын
Appreciate this video! Thank you for getting into the details of what numbers are conservative and why! Great content everytime
@TylerCauble2 жыл бұрын
Glad you enjoyed!
@shaheemalam93972 жыл бұрын
Hey Tyler, how did going from 8.0% CAP to 7.0% cap make the returns higher? Doesn't that mean that either the NOI went down or that price went up?
@TylerCauble2 жыл бұрын
No - the cap rate is the valuation of the property. If the NOI is $100,000, the property would be worth $1,250,000 on an 8% cap rate and $1,428,571 on a 7% cap rate
@ethanfoote7456 Жыл бұрын
Hi Tyler, your info is straight forward & love it. Coming from the residential underwriting lending side into commercial underwriting, I think the definition of underwriting differs. In residential underwriting, I am used to reviewing and validating all of the income, assets, title, credit, cash-flows, and property value from an appraisal to issue a commitment to lend/loan terms approval with reliable third-party documentation. Is the commercial lender's underwriter validating each and every one of these inputs into these spreadsheets using third-party engines like CoStar for Sales/Marketing info, Comp Stack for comparable sales & leases, and RCA for sales and refi information? Trying to get a better understanding of exactly what the commercial lender's underwriter validates and uses to issue an approval/term sheet.
@TylerCauble Жыл бұрын
Absolutely - glad you're enjoying it! Commercial lenders look at global aspects of the deal / you to determine the loan approvals. They'll look at your cash flow, debt and assets, the value of the property and your purchase price, what your plans are with the site, and the current cash flow of the property. It can be far more intense than residential, for sure
@fernandomejia57122 жыл бұрын
I like everything but wish there was of better expense calculator to figure out per sq foot expense.
@TylerCauble2 жыл бұрын
Are you talking about estimating your operating expenses or calculating what they are on a square footage basis? If the latter, you just take the total annual number and divide it by the total square footage of the building
@baronartis7918 Жыл бұрын
Will the software work for Multi-family investors?
@TylerCauble Жыл бұрын
Yes - we have a spreadsheet geared directly for multifamily investments here: www.tylercauble.com/resources
@MuhammadAli-bp6iq2 жыл бұрын
Amazing information ℹ️
@TylerCauble2 жыл бұрын
Glad it was helpful!
@Woodshadow2 жыл бұрын
I've never looked at a property with only the refinance in mind when it comes to calculating the IRR. I was wondering why the clients would be okay with a 10% IRR but if they continue to get 10% CoC returns or higher after the fact then that makes sense. I haven't found any crazy off market deals like this before. The best I am finding is ones with 13-15% IRR after sale and definitely not 10% CoC
@TylerCauble2 жыл бұрын
I think they certainly could be good with a 10% IRR if they're investing for cash flow today instead of investing for appreciation. Ideally, you have both, but that's not always possible on a deal
@eugenenetanel7142 жыл бұрын
Great analysis, very useful. Minute 23:05: what values go into the calculation of the IRR 10.78%? How is it calculated?
@TylerCauble2 жыл бұрын
That's a great question - IRRs are incredibly tough to calculate and take into account the returns over a period of time. We use excel to calculate the IRRs for us
@HEOEvgeny5 ай бұрын
Great stuff. Keep showing up and we will watch it
@TylerCauble5 ай бұрын
I appreciate that!
@erginsadikaj88382 жыл бұрын
Tyler, thank you for sharing this video, it's extremely helpful. Is it okay to use this spreadsheet for Industrial as well?
@TylerCauble2 жыл бұрын
Absolutely! And yes - you can use it for any type of commercial properties. You will need to modify it a bit depending on tenants / lease structure /etc., but it'll get the job done
@lemlavarin Жыл бұрын
Great video! How would I determine a good rule of thumb for operating expenses? Should I reach out to a property management company in the specific market for the same class of property I'm looking for or is there a general rule of thumb for operating expenses? Thanks in advance!
@TylerCauble Жыл бұрын
It's really tough to get a rule of thumb for opex because it depends on the product type, the market, tenants, etc. I recommend reaching out to local management companies or asking the seller for their historical opex (which should definitely be in your due diligence box when evaluating a property) because that will give you a better idea of what to expect.
@lemlavarin Жыл бұрын
@@TylerCauble Makes sense! Thanks for the reply.
@TylerCauble Жыл бұрын
@@lemlavarin anytime!
@jonathanchan60522 жыл бұрын
On the Commercial Underwiting Spreadsheet...cell V83 has a formula to show 0 if the year 1 CF is less than 0. However, it looks like this cell should be the same as cells V94 and V104. Why are we not allowing a negative CF come through in the IRR calc for year 5, but allowing it to come through on years 2 and 3? I also noticed that a lot of the year 1 pro forma calculates are based on the information contained in Column D. Should the increases be based on column E, which contains the current owner information?
@fernandomejia57122 жыл бұрын
If purchase you software will I get the upgrade at no charge? Your Proforma is only for 5 years
@TylerCauble2 жыл бұрын
Yes - anytime we make updates to the software, we send it out to everyone that has purchased it from us previously
@fernandomejia57122 жыл бұрын
Saw this ffew times, now that I have been using it this video make sense to me now . Thanks
@jonathanchan60522 жыл бұрын
Are the calculations in Z83 and Z117 relevant to the spreadsheet or any other calculations? Why are the Year 5 and 3 IRR tables taking initial investment into account, but not year 2?
@nedmarkey83242 жыл бұрын
How do I find guys like you to invest with?
@TylerCauble2 жыл бұрын
It's pretty tough. You can schedule a time to speak with me about getting into our investments here: calendly.com/tylercauble but usually you have to get out and network to find deal sponsors. Real estate investor groups are a good start
@jovekuang19552 жыл бұрын
Cool content! Thanks for sharing!
@TylerCauble2 жыл бұрын
Of course!
@AlexRodriguez-hs2ib3 жыл бұрын
Great video! Thank you for sharing !
@TylerCauble3 жыл бұрын
For sure!
@bernardotorres45613 жыл бұрын
excellent video
@TylerCauble3 жыл бұрын
Thank you, Bernardo!
@TylerCauble3 жыл бұрын
Thank you, Bernardo!
@thebestken2 жыл бұрын
20:31 Do you think investors can wait for 2 years to get 11% preferred return?
@TylerCauble2 жыл бұрын
Depends on their other investment options - do you mean 11% total over the 2 years? If so, I doubt it - that's only 5.5% per year
@thebestken2 жыл бұрын
@@TylerCauble I mentioned your video at 20:31 where first two years there is no return. That's what I was referring to. Your own example. Why should I be interested in this deal when 11% CoC is on 3rd year?