MF Underwriting Rules of Thumb
Hey all - I've recently relocated from Los Angeles to a smaller city in the Northwest US. I'm working on buying apartment buildings in the 15-20 unit range and trying to figure out some rules of thumb to gut-check the expenses I'm using in my underwriting.
I used to work in commercial brokerage so you'd think I'd just *know* it, but... that was in LA and on way bigger projects!
Anyway, cost of living in my target region is right at the national average - not too cheap, not too expensive. I'm hoping you can help me with some rough per-door per-year numbers and any other rules of thumb you use. I generally bucket all my expenses into the following:
Payroll (Note: payroll made more sense on the institutional deals I used to work on. I don't think I'll really have a payroll expense on these smaller deals - but, if that's true, it really blows up a lot of the ratios I used to use 'cuz it can be a big expense.)
Marketing
G&A
Turnover
R&M
Contract Services
Utilities
Property Taxes
Property Management
Insurance
Capital Reserves
Specifically - I'm looking for per-door per-year numbers for the above, and total expense as a % of EGI (or gross) for these smaller (15-20 units) deals.
Thanks in advance!