Source for pro-formas for practice underwriting?

Question

Hi Everyone,

So I just got my 4th SFR property, a nice condo here in Old Town, and good numbers.  I've decided that my next purchase will be a multi-family, I've had a duplex, but nothing bigger.  I've got a pretty heavy construction/maintenance/project management background, and now have a day job in a real estate office.

30-odd years on the planet have taught me the value of preparation, and therefore, I would like to begin to work on 1-2 pro-formas/T-12's, and P&L's per week, to familiarize myself with the language, and learn how to spot a deal.

The management, renovations, etc, I'm fine with, but the financial statements, operating budgets, etc, I want to bring up to speed.  I'm firmly of the belief that to get good at anything, you have to practice.  Preferably a lot.

So, anyone out there have ideas or sources for looking at deals?  I don't want to waste some broker's time being a looky-loo, as that's what I am at the moment.  I'd want to look at price, rents, expenses, P&L, and in an ideal world, T-12's or T-6's at a bare minimum.

Closed deals would be fine too, as then I'd know where they started, and finished, and most importantly, what a commercial lender will work with.  I'm planning on 25% down to get this done.

Anyhow, ideas?  Past deals done?  Anyone want lunch on me?

Nick B. · Answer

@Darwin Crawford,

Apartment brokers such as Marcus & Millichap or CBRE are a good source of pro-formas. You'll also kill two birds with one stone: get to know brokers in your area and get listings to analyze.

Try PM companies as well. They may give you a good idea of what your expenses should look like.

Nick

Oren K. · Answer

Most if not nearly all brokers of any size now have web sites and if you are willing to register (sometime only an email address required), it will give you access to all their marketing material (OM's, Proformas's, etc.). Some brokers need to authorize you for each property but most are very easy about it.

Another source would even be Loopnet. Registration is free and whatever the listing agent posts becomes available for download. Many listings will have nothing and you need to contact the agent but quite a few put up the OM which will contain most of what you want.

Yet another site is Auction.com. As a registered user, you are asked to agree to a confidentiality agreement for each property you are interested in. Once you do, you have access to all the documents they are providing; OM's, T-12, Rent Rolls, Lease Abstracts. Some will have everything form a survey to detailed maintenance log and others will have very skimpy information. It all depends on what the agent can extract from the owner. As a bonus on this site is that once you get access, you are notified of any updates / additions.

CBRE Marketplace, Marcus & Millichap, etc. are similar as well. Registering and agreeing to confidentiality on each property opens up access.

Another exercise you may consider doing with OM's is to look at how they are structured and ask yourself Why it is the way it is (hint - lead with strength).

Hope that helps.

Justin Caballero · Answer

I'm in a similar position in that I want to get better at understanding, underwriting, and analyzing multifamily deals. Currently, I work for a student housing real estate developer, and I'm studying some of his past deals and seeking new rehab and development opportunities near campuses throughout the Southeast US (predominantly). Searching for deals and using past deals to run numbers on Excel on new deals has been the most beneficial so far. I've found a deeper understanding of the deal occurs when I actually lay out the deal on excel myself rather just reading over them.

Additionally, reviewing deals on crowdfunding websites such as RealtyShares has helped me study real deals. There are many sites like RealtyShares posting real estate deals daily. I got that recommendation from an article written by the owner of AStudentOfTheRealEstateGame.com . It's also a great website and learning source.

Would love to here more ideas. Please feel free to reach out anytime. Always looking to learn and connect!

All the best!

Nir Babajani · Answer

Hey @Darwin Crawford i'm in the same position. I've approached companies I work with and told them upfront that I want to advance to the MF sphere from the SFR properties and need some past done deals from them in order to soak them in and learn about it. i found this approach to work well, and I don't think developers/agents would say no becasue this will give u the option to trust them and work with them for your future purchase, hence - eliminating the lookie-loo position.

that being said, i would also love more references for past deals in order to optimize my ability to analyze the deals

Darwin Crawford · Answer

Oh, I should add to this that I am aiming for something 8 units or larger.  Market location still up in the air.  Would like my first one to be a 10-cap or better, B/C grade value-add.

Source for pro-formas for practice underwriting?

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