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Updated almost 3 years ago on . Most recent reply

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Victor Olvera
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underwriting 2-4 units

Victor Olvera
Posted

im fairly new at this, im trying to get my underwriting skills down. im currently watching the link attached to understand it. so im starting out with a fourplex with a VA loan soon. and when I start looking im trying to understand how to underwrite it. or would underwriting be for 5+ units? just trying to get all-around knowledge of this technique.

;t=3511s

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Brandon Rush
  • Real Estate Agent
  • Portland, CT
837
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Brandon Rush
  • Real Estate Agent
  • Portland, CT
Replied

Hey Victor,

Underwriting 2-4 unit properties is relatively simple. It's actually very similar to underwriting 5+ unit properties. If you are able to obtain the current income and expenses on the property, you can assess how the property will perform on day one. Once you start trying to determine the property's potential value after any kind of value add, that's where things will differ. With the 2-4 units, you are generally only going as high as the highest comp in that neighborhood. With the 5+ units, you will examine the new net operating income to help in determining the new potential value. 

Hope that is helpful and good luck!

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