Underwriting Commercial Multifamily

Investor · NJ · Member since 2019 · 18 posts · 2 votes

Hello BP

I'm getting off-market commercial multifamily leads and I would like to learn how to underwrite 8+ unit multifamily. I would appreciate if you can share which calculator/spreadsheet do you use.

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Evan Polaski

Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes

@Susana W.

I find the adventures in CRE spreadsheets to be fairly robust. Personally, I have seen and played with many of the "guru" sheets and find a lot to be desired, but at the same point if you are wanting a simply cash flow calculator, they tend to be fine.

When I see "would like to learn" though, I always like to reiterate that underwriting is part art and part science.

The science is the calculator and phone calls to get inputs.

The art is seeing something others don't. Is it a market that actually rewards great design and your goal is to push rents higher by not doing the standard formulaic grey walls and whitewashed LVP? Do you know the market inside and out, and understand things like being one block further away/closer to some draw actually makes a big difference in tenant demand? That being on the eastside of the interstate creates more traffic flows and better visibility than the westside? etc

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Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 728 votes
1y
Quote from @Susana W.:

Hello BP
I'm getting off-market commercial multifamily leads and I would like to learn how to underwrite 8+ unit multifamily. I would appreciate if you can share which calculator/spreadsheet do you use.

Hi @Susana W., welcome to the BP Forum! Can you share some numbers on your deal? The forum is very active and you should get a lot of folks that will provide suggestions.
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Vessi Kapoulian
Investor · Los Angeles, CA · Member since 2020 · 102 posts · 94 votes
1y
@Susana W., there are many models out there. I have found that for investors new to multifamily underwriting, the syndicated deal analyzer by Michael Blank is the easiest to digest and use.
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Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
1y
@Susana W. Hi. I’m probably in the minority but I like the basic Biggerpockets rental calculator. It has its limits but you can get creative with it and do extra stuff. Free for first 5 uses then unlimited with Pro.
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1y
Quote from @Susana W.:

Hello BP
I'm getting off-market commercial multifamily leads and I would like to learn how to underwrite 8+ unit multifamily. I would appreciate if you can share which calculator/spreadsheet do you use.

I would look to take a course at a place like getrefm or at an instititution (college) that will be on underwriting MF. There is a lot more to it than just the numbers when underwriting a MF deal - of course there is the initial underwriting to check if the numbers work but that typically does not tell the full (or even half) the story.
7e investments53 Reviews
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1y
Quote from @Susana W.:

Hello BP
I'm getting off-market commercial multifamily leads and I would like to learn how to underwrite 8+ unit multifamily. I would appreciate if you can share which calculator/spreadsheet do you use.

I would look to take a course at a place like getrefm or at an instititution (college) that will be on underwriting MF. There is a lot more to it than just the numbers when underwriting a MF deal - of course there is the initial underwriting to check if the numbers work but that typically does not tell the full (or even half) the story.
7e investments53 Reviews
Website View Page
0 Reply
Dennis Bamford
Investor · Indianapolis · Member since 2024 · 96 posts · 53 votes
1y
Quote from @Susana W.:

Hello BP
I'm getting off-market commercial multifamily leads and I would like to learn how to underwrite 8+ unit multifamily. I would appreciate if you can share which calculator/spreadsheet do you use.

Hello Susana, you can get the 10bii in the app store on your phone for $6. It has links inside the app that will take you to videos that walk you through everything you need to know.
Spreadsheets are ok but, I like to do the calculations myself and it's easier to play with the numbers IMHO.
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Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
1y
@Susana W.
I find the adventures in CRE spreadsheets to be fairly robust. Personally, I have seen and played with many of the "guru" sheets and find a lot to be desired, but at the same point if you are wanting a simply cash flow calculator, they tend to be fine.
When I see "would like to learn" though, I always like to reiterate that underwriting is part art and part science.
The science is the calculator and phone calls to get inputs.
The art is seeing something others don't. Is it a market that actually rewards great design and your goal is to push rents higher by not doing the standard formulaic grey walls and whitewashed LVP? Do you know the market inside and out, and understand things like being one block further away/closer to some draw actually makes a big difference in tenant demand? That being on the eastside of the interstate creates more traffic flows and better visibility than the westside? etc
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Givo Aghasi
Lender · Los Angeles, CA · Member since 2022 · 238 posts · 73 votes
1y
@Susana W. Nice! I usually keep it simple at first—take gross rental income and subtract about 30% for expenses to get a rough NOI. From there, divide by your annual debt service to check if you're hitting that 1.25 DSCR. I've used a few spreadsheets over time, but honestly, even a basic one with rent roll, expenses, and financing terms can work well to start. Happy to hear more about what kind of deals you're looking at—might be able to help you refine it!

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