Mike Taravella discusses the importance of understanding your rent roll as a buyer and an owner.
Your rules of thumb need to be updated as the market changes! Take a look at your underwriting for insurance, taxes, etc. to make sure things haven’t changed.
- Keep engaging with insurance companies annually as well as replacement costs may be changing drastically
- How are your taxes assessed? Do not assume the previous taxes and do not assume you will be reassessed at the time of purchase. Know your rules!
Know your property and what the various projections mean. Your deal on paper is 1 of 1,000,000 things that could happen to the property
Have defensible underwriting. What is conservative and why? Be able to backup your projections based on your market research.
Understand management and what value it adds to/takes away from you. Does self-management make sense?
Pro tip: Have your team work items separately and aggregate results to prevent group think and/or confirmation bias.
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