Unlocking Multifamily Deals: Three Numbers That Reveal All

OVERVIEW

In this episode of the Ironclad Underwriting Podcast, Jason and Frank break down the pitfalls of oversimplified underwriting, especially the “three-number method” popularized by real estate gurus. They explore why back-of-the-napkin math can help you screen deals, but will never replace real due diligence, business planning, and detailed financial analysis.

TOPICS COVERED

• The danger of underwriting large apartment deals with only three numbers
• How gurus oversimplify investing to sell programs
• Why initial calculators and 60-second models should only guide early screening
• The importance of lease expirations, turnover costs, payroll, taxes, insurance, and repairs
• How business plans drive NOI improvement
• Market realities: when rules of thumb like the 1% rule break down
• Risks hidden in commercial leases and long-held properties
• The role of consultants and advanced underwriting beyond mentorship programs

QUOTES

• “Trying to buy a 10, 20, 30, 40 million dollar apartment complex based on three numbers is probably a problem.”
• “Those three numbers are good, but getting those three numbers is the hard part.”
• “Gurus try to make it as basic as possible so you’ll buy their program, but that’s not how you build a real underwriting foundation.”

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