What I do all day

Mostly, it’s underwriting deals.

Here’s what happens:

  • Either I find a deal on the MLS, Loopnet, etc. or else a broker or client sends it to me
  • I get my hands on the rent roll (surprisingly hard, sometimes)
  • I look at the property on google maps to get a sense for the location and, critically, the style of building
  • I look at the property on ZIMAS to get the square footage and unit mix
  • Based on our experience renovating about a million deals, I concoct a plan for the property which seeks to maximize the yield post-renovation; everything is on the table, from moving walls to expanding to outdoor space… you name it
  • I make a little model that looks at the cost of buying, the cost of rehabbing, the estimated rents, and the estimate expenses to get at an expected yield
  • I speak with my partner Jon to confirm / fix my assumptions
  • If the deal meets our target yield, we write an offer

Sounds pretty simple, right? The reason is works is that we do so many deals that we (1) know pretty quickly what the optimal plan for the building will be; (2) how much it will cost / how long it will take; and (3) what the rents and expenses will be.

It’s not that we are never wrong; there are surprises in every business, ours included. It’s just that we’re wrong very, very rarely.