Once our acquisitions team has done the initial due diligence on a deal, and it passes initial review, it goes to our financial team led by managing partner, Danny Randazzo. It’s then run through a comprehensive analysis to ensure it meets our strict and conservative criteria. This analysis includes but is not limited to:
- Stress Testing – Can the property hit 60% occupancy or less, and still meet all financial obligations?
- Modeling significant operating reserves – Will the business plan operating reserves cover 8+ months of no income in a highly unlikely catastrophic/economic event?
- Projecting conservative exit returns
- Renovation/Value Add Plan – Vet and verify operating and capital expenditures – based on local trade rates, property management input and decades of professional experience
- Conservative occupancy rates compared to market – modeling less than market occupancy markets
- Conservative rental rates compared to like kind assets in the subject market
- Plan for a conservative stabilization timeline