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Deep dives on underwriting concepts, deal analysis frameworks, and operator insights. Written for investors who want to understand the "why" behind the numbers.
Key takeaways
- •DSCR measures cash flow coverage - can the property service its debt?
- •Debt yield measures asset-level returns - what return does the lender get?
- •LTV measures collateral coverage - how much equity cushion exists?
- •All three metrics work together to assess deal risk from different angles
Key takeaways
- •Asymmetric growth assumptions (3% rent, 2% expenses) create false returns
- •Insurance and property taxes often grow faster than revenue
- •Small modeling errors compound over multi-year hold periods
- •Use market data to validate both revenue and expense growth rates
Key takeaways
- •Structured framework prevents analysis paralysis and missed diligence
- •Always identify 2-3 key assumptions that make or break the deal
- •Document red flags even if you proceed - crucial for future reference
- •Decision criteria should be established before analysis begins
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