CRE Underwriting Guides
Institutional underwriting, explained for the investor who pulls the trigger themselves — IOS / covered-land plays, honest cap-rate math, and the metrics lenders actually test.
Deal Teardowns
Real, anonymized underwrites — how a deal looked on the cover page versus what the numbers actually said.
The IOS Yard Where the Broker Yield Falls Apart
An IOS yard at an attractive broker yield that drops once you adjust for usable acres, landlord carry, and month-to-month income — how true land yield really pencils.
Read the teardown → TeardownGreat IRR, No Cash Flow
A deal projecting a 20% IRR and 2.0x equity multiple with almost no cash flow — why back-end-loaded returns are fragile and what to check before you trust an IRR.
Read the teardown → TeardownThe Multifamily Deal That Cash-Flows on Paper but Won't Get Financed
A stabilized multifamily deal at a clean 6% cap rate that still failed at the lender — why DSCR, not cap rate, sized this loan, and how to spot a debt-service-constrained deal early.
Read the teardown → TeardownThe NNN Cap Rate That's Hiding the Risk
A single-tenant NNN building at a 7% cap that's really a bet on one non-credit tenant renewing a short, above-market lease — how to price the lease risk the cap rate hides.
Read the teardown → TeardownThe Reserves Line That Quietly Kills Your Returns
The same building underwritten with and without reserves — how skipping the reserve line overstates cap rate, cash flow, and IRR, and the convention that keeps you honest.
Read the teardown → TeardownHow I Underwrote a $10.8M Industrial Sale-Leaseback — and Why Rent Coverage, Not the 7% Cap, Nearly Killed It
A working investor's teardown of a 7% cap industrial sale-leaseback — why the headline cap looked clean and how tenant rent coverage exposed the real risk.
Read the teardown → TeardownHow I Underwrote an IOS Yard — and Why Rent-Per-Acre and Zoning, Not the Cap Rate, Made the Call
A practitioner's teardown of an IOS land deal — why cap rate misframes a land asset and how rent-per-acre, land yield, and zoning reveal the real value.
Read the teardown → TeardownWhy I Passed on a “6.5% Cap” Multifamily Deal That Was Really a 4.9%
A teardown of a value-add multifamily deal — how a broker's 6.5% stabilized cap became a sub-5% true cap once reserves, real vacancy, and P&I debt went in.
Read the teardown →Guides
Cap Rate vs. Cash-on-Cash Return
Cap rate vs cash on cash return explained — cap rate is the unlevered yield on price, cash-on-cash is the levered yield on the equity you actually invest.
Read guide → comparisonCap Rate vs. Yield on Cost
Cap rate vs yield on cost explained — going-in cap measures the price you pay, yield on cost measures the return you build through value-add capex.
Read guide → underwritingCash-on-Cash Return, Explained
A plain-English cash on cash return guide — annual pre-tax cash flow divided by total cash invested, why it's a year-one snapshot, and how it differs from IRR.
Read guide → asset-playbookHow Clear Height Drives Warehouse Value
See how clear height warehouse value works — taller clear height commands higher rent per square foot and can add over $1.5M of value on the same footprint, with a worked example.
Read guide → metricsDebt Yield, Explained (and Why Lenders Trust It)
Debt yield explained — NOI divided by loan amount, the rate-blind, value-blind lender floor that does not move when interest rates or cap rates do.
Read guide → metricsThe Equity Waterfall, Explained (GP/LP Splits)
Equity waterfall explained — how distributions flow through return of capital, preferred return, and an 80/20 promote split between LP and GP, step by step.
Read guide → asset-playbookMultifamily Operating Expense Ratio (OER)
Understand the multifamily operating expense ratio — how to calculate OER from expenses and EGI, what range is normal, and why a low OER is a red flag.
Read guide → comparisonGross Lease vs. Triple Net (NNN)
Gross lease vs triple net NNN explained — who pays operating expenses determines landlord NOI, which is why face rents are not comparable across lease types.
Read guide → underwritingIRR vs. Equity Multiple: Why Two 2.0x Deals Aren't Equal
Understand IRR vs equity multiple — why two deals returning the same 2.0x can have wildly different IRRs because IRR weights time and the equity multiple ignores it.
Read guide → asset-playbookLoss to Lease, Explained
Loss to lease explained — what it is, how to calculate the gap between in-place and market rents, and why it is upside you capture with zero capital.
Read guide → metricsLTV vs. LTC: Two Leverage Tests, One Loan
LTV vs LTC explained — loan-to-value measures debt against appraised value, loan-to-cost against total project cost, and lenders size to the lower loan.
Read guide → comparisonNOI vs. EBITDA
NOI vs EBITDA explained — NOI is a property-level income measure, EBITDA is company-level; in a sale-leaseback the tenant's EBITDAR must cover the rent.
Read guide → underwritingNet Operating Income (NOI): How It's Calculated
A clear net operating income calculation walkthrough — EGI minus operating expenses equals NOI, and exactly what NOI excludes (debt, capex, depreciation, tax).
Read guide → metricsPreferred Return: How the 8% Pref Works
Preferred return real estate explained — how the 8% pref is calculated on LP capital, the order it gets paid in, and how compounding changes an unpaid year.
Read guide → underwritingHow to Build a Commercial Real Estate Pro Forma
Learn how to build a commercial real estate pro forma step by step — from gross potential rent through vacancy, EGI, operating expenses, and NOI.
Read guide → metricsReal Estate Promote (Carried Interest), Explained
Real estate promote carried interest explained — how a GP earns 20% of profit above the preferred return, why it's an incentive, and how multi-tier promotes work.
Read guide → asset-playbookMultifamily Cash-Out Refinance Underwriting
Multifamily cash-out refinance underwriting — how to size a new loan from stabilized NOI, pay off existing debt, and return capital while DSCR holds.
Read guide → asset-playbookHow to Analyze a Rent Roll
Learn how to analyze a rent roll for a multifamily deal — read in-place vs market rents by unit type, quantify loss to lease, and spot risk.
Read guide → underwritingReplacement Reserves in Underwriting
A replacement reserves underwriting guide — what they are, why they belong below NOI, and how a small per-unit reserve quietly changes value by hundreds of thousands.
Read guide → underwritingSensitivity Analysis: How Exit Cap Rate Moves Value
A real estate sensitivity analysis primer — hold NOI constant, flex the exit cap rate, and watch how a 50 bps move swings value by hundreds of thousands of dollars.
Read guide → asset-playbookSingle-Tenant Credit Analysis for NNN Deals
Single-tenant credit analysis NNN deals hinges on tenant quality — investment-grade vs non-rated tenants can swing value by $2.5M on identical rent, shown with a worked example.
Read guide → asset-playbookValue-Add Multifamily Underwriting
A practical guide to value-add multifamily underwriting — sizing renovation cost, rent lift, return on cost, and the value created at exit cap.
Read guide → asset-playbookHow to Build a Warehouse (Industrial) Pro Forma
Build a warehouse industrial pro forma the right way — base rent, NNN expense reimbursement, and landlord NOI walked through with a 100,000 sf worked example.
Read guide → iosIndustrial Outdoor Storage (IOS): The Investor's Guide
What industrial outdoor storage is, why investors want it, and how to source, value, and underwrite IOS deals — rent per acre, land yield, zoning, and covered-land plays, from working operators.
Read guide → underwritingBroker Cap Rate vs. True Cap Rate: What Sellers Don't Show You
Brokers quote cap on gross, pre-reserves NOI; the true cap backs out reserves and real landlord costs. Learn to compute each and why the spread decides the price.
Read guide → underwritingHow to Calculate a Cap Rate (and What a Good One Looks Like)
Cap rate = NOI ÷ price. Here's exactly which NOI to use, what counts as a good cap rate by asset class and rate environment, and the broker-vs-true caveat that decides the price.
Read guide → underwritingHow to Calculate DSCR and Why Lenders Care
DSCR = NOI ÷ annual debt service. Here's how to calculate it, the ~1.20–1.25x minimum lenders expect, and how it caps the loan you can actually get.
Read guide → underwritingIRR vs. Equity Multiple: How to Read CRE Returns
IRR measures the speed of return; equity multiple measures the total. Here's what each one captures, why you need both, and how hold period distorts a head-to-head comparison.
Read guide → iosHow to Underwrite an IOS Deal (Industrial Outdoor Storage)
A complete guide to underwriting industrial outdoor storage (IOS) — land-based rent per acre, broker vs true cap, covered-land optionality, and a worked example.
Read guide → asset-playbookHow to Underwrite a Multifamily Deal
A step-by-step multifamily underwriting playbook — rent roll to GPR, vacancy, expenses and reserves, NOI, exit cap, and the DSCR and IRR that decide the deal.
Read guide → asset-playbookHow to Underwrite a Small Industrial Deal
A practical small-industrial underwriting playbook — single vs multi-tenant, NNN vs modified-gross, clear height, rollover and dark-period risk, broker vs true cap.
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