Underwriting is a crucial part of sealing a real estate syndication deal. That’s why any sponsors or investors need to familiarize themselves with the process. In this highlights episode, we look back on our conversations with Rob Beardsley, co-founder of Lone Star Capital Group, and Anna Myers, COO of GroCapitus.
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Rob talks about the key fundamentals people need to know about underwriting. He also differentiates underwriting from a passive investor and sponsor perspective. Meanwhile, Anna shares how you can mitigate risk by conservatively underwriting a real estate syndication deal. She also explains how to analyze T-12 documents and expenses while studying a new deal. Listen now and get your much-needed information about underwriting!
Key Points From This Episode:
- The fundamentals of underwriting for passive investors or LP and sponsors or GP.
- Some of the things a passive investor needs to look out for are underwriting as well as making sure the numbers look right or are truly historical.
- Rob shares what passive investors look for in underwriting.
- What can be considered conservative underwriting?
- Tips and Tricks for correctly underwriting a real estate syndication deal
- How to procure financial documents and correctly analyze data while underwriting a deal
- Tips and Tricks for using Deal Analyzer while syndicating a deal
- How to predict the future performance of property by forecasting property rents
- How to unlock value add by upgrading units and bumping up rents
- Anna shares how you can analyze T -12 expenses to figure out any discrepancies
- Are there industry standards for expenses in the syndication business?
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“Starting it as a passive investor, being at least knowing the key factors or some of the key indicators that drive the underwriting is helpful when evaluating a deal.” — Rob Beardsley
“Some of the ways that I would encourage investors looking into a deal’s historical calculator is first, I would make sure that the numbers you’re looking at are truly historical. Nothing is being projected out into the future that these numbers actually happened in the past.” — Rob Beardsley
“First of all, I do want to say that underwriting is knowing the numbers of a deal are critical. And, knowing how to underwrite is an essential part of being a syndicator.” — Anna Myers
“You need to figure out what you’re paying. Is it reasonable what you’re paying?” — Anna Myers
Links Mentioned in Today’s Episode:
Lone Star Capital Group website
WS186: The Fundamentals Of Underwriting with Rob Beardsley
WS65: How to Conservatively Underwrite a Real Estate Syndication Deal with Anna Myers
About Rob Beardsley
With a background in business and computer science from Carnegie Mellon University, Rob leads the underwriting and structuring function for Lone Star Capital Group.
Prior to co-founding Lone Star, Rob had extensive real estate experience through his family’s numerous real estate businesses including development, construction, sales, and investment.
Rob also actively publishes articles and whitepapers about real estate capital markets, multifamily strategy, and deal structuring.
About Anna Myers
Anna is a third-generation commercial real estate entrepreneur who applies her 25+ years of experience in technology and business to finding, analyzing, acquiring, and asset managing commercial properties in key markets across the U.S. As a tech geek and systems architect, Anna is known as the ”Chief Plate Spinner” at Grocapitus. She collaborates with her business partner, Neal Bawa, to implement systems and processes that strive for efficiency and scalability both within the company as well as throughout their portfolio.
As the head of acquisitions for the company, Anna teaches underwriting and deal analysis for MultifamilyU in quarterly Boot Camps. MultifamilyU is an apartment investing education company owned by the principal, Neal Bawa. Also via MultifamilyU, Anna hosts weekly webinar events featuring top speakers in real estate. As the head of asset management for the Grocapitus portfolio, Anna brings a data-driven approach to track and insert optimizations to the properties to help drive property performance and investor returns. Anna regularly speaks on podcasts, webinars and at conferences covering topics including Asset Management, Deal Analysis, Real Estate Trends, Opportunity Zones, How to 1031 into a Multifamily Syndication, and much more.
Because real estate is an occupation that can create abundant opportunity in lifestyle, Anna is also a digital nomad living and working remotely from beautiful locations all over the US, currently residing on the East Coast in Boca Raton, Florida.
Full Transcript
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