HOW WE UNDERWRITE
What are we taking on, and what would make it worthwhile?
Before making an offer, we want to understand what it will take to own the property through good years and difficult ones. We examine the income it actually collects, the work it needs, and the debt it can carry. We also ask what the seller wants to accomplish. Both matter if we are going to agree on terms and follow through.
HOW WE START
Understand the property and the seller’s situation.
We review the property while getting to know the seller and the broker representing them. What is prompting a sale? What does the seller need to accomplish, and where is there room to consider different terms? The answers help us evaluate whether an opportunity fits before either side spends time on a detailed offer.
01What is true about the property today?Start with current leases, collections, occupancy, expenses, taxes, repairs, and debt.
We trace the rent roll to the leases and collections, compare operating statements with bills and tax records, and separate recurring items from one-time items. Projected upside does not go into the as-is case.
02What does the seller want to accomplish?Understand the seller’s objectives, debt, timing, tax concerns, and flexibility in the terms.
We ask the seller and their broker what must happen at closing and what could be arranged differently. We consider debt payoff, cash needs, management responsibilities, tax concerns, and what the seller wants to keep. The broker’s understanding of their client helps us assess the whole situation.
03What does ownership really cost?Carry management, maintenance, reserves, insurance, capital work, and the tax bill after a sale.
A property is not allowed to look better because somebody left out management, future repairs, or a likely tax reassessment. We use the expense load the next owner should expect, not the lightest version of the seller's history.
04What could change the answer?Test debt maturity, leasing, infrastructure, construction, timing, and the cash needed if the plan is late.
We identify the assumptions that can change the answer, then test them directly. A deal that works only when everything goes right is not ready.
05What work does the plan require?Separate current income from proposed rent increases, occupancy gains, and operating improvements.
Every improvement needs a cost, an owner, a sequence, and evidence that it can be completed. The stabilized case earns its place in the analysis; it is not blended into today's value.
THE OFFER
What would the seller receive, and what would we be responsible for?
A seller may need a debt payoff at closing, time to complete an exchange, or relief from management. We work with the seller and their broker to understand those needs alongside price, tax consequences, and any continuing obligations. A note, an exchange, or retained ownership may deserve consideration when the property and the circumstances support it.
From the papers: Seller Financing: Would You Want to Own the Note?
Before counting on a profit, we consider how we would recover the equity invested if rents fall, work takes longer, or refinancing is unavailable. Proposed rent increases and improvements remain separate from the income the property earns today.
DUE DILIGENCE
What do we need to confirm before closing?
We send the request list early and explain what we need to verify. Open questions stay visible. If the facts change, we revise the offer or walk away.
Income and leasesLeases, collected rent, delinquencies, and vacant or offline space.
We do not rely on the rent roll by itself. We reconcile names, terms, collections, delinquencies, and vacant or offline space so the income in the model has a document behind it.
Costs and capital workOperating history, repairs, reserves, and the work needed after closing.
We look across several years when records permit, distinguish maintenance from capital work, and build a first-year budget that includes the work needed after closing.
Property and siteCondition, utilities, permitted use, and evidence for proposed improvements.
We establish how the property is physically and legally used today before giving credit to a future plan. The checklist changes by asset. In a land-lease community, for example, we verify every occupied site, the utility systems, park-owned homes, pad sizes, roads, and expansion claims. Independent reports and public records support the review.
Market and peopleLocal demand and the people responsible for leasing and operations.
We speak with the onsite manager and the people closest to the work. A spreadsheet cannot tell us whether the operating plan is realistic or whether the right person owns it.
Legal, title, debt, and notesTitle, loan terms, note files, collateral, and unresolved legal questions.
We review the available legal record and coordinate unresolved legal questions with counsel. Where homes or other property carry notes, we also review the note files, payment histories, collateral, and applicable compliance. Missing or inconsistent documents stay on the open-item list until resolved.
LET’S TALK
Have a property for us to consider?
Send the property details, the asking price or proposed terms, and the rent roll and operating history available. Tell us what the seller is trying to accomplish, any debt or timing constraints, and whether there is flexibility in the terms. If you are the broker, include your perspective on the property and your client’s situation.
Tell us about the opportunity