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Deals don’t fail on closing day, they fail in the spreadsheet. We open the hood on how we actually underwrite Northwest Arkansas real estate right now, cutting through hype and focusing on decisions that protect cash flow and sleep. From rent comps in Fayetteville, Springdale, Rogers, and Bentonville to the new wave of A‑class concessions, we map the reality on the ground: tight vacancies in key unit types, steady absorption, and slower rent growth that rewards disciplined assumptions over wi...
Deals don’t fail on closing day, they fail in the spreadsheet. We open the hood on how we actually underwrite Northwest Arkansas real estate right now, cutting through hype and focusing on decisions that protect cash flow and sleep. From rent comps in Fayetteville, Springdale, Rogers, and Bentonville to the new wave of A‑class concessions, we map the reality on the ground: tight vacancies in key unit types, steady absorption, and slower rent growth that rewards disciplined assumptions over wishful thinking.
We start with the essentials, pulling a clean T12, validating the rent roll, and running a true market survey within one to three miles, bracketed by vintage and finish. Then we show how to phase rent increases over 6–12 months based on lease expirations and planned upgrades, instead of flipping to “market” on day one. On expenses, we get specific: model insurance with live quotes, assume 30–50% tax resets post-sale, add professional management even if you plan to self-manage, and fund maintenance and CapEx reserves for roofs, HVAC, plumbing, and turns. No more 30% expense ratios inherited from mom-and-pop books.
We also break down DSCR in plain English and why lenders look for 1.20–1.25 minimum at stabilization, plus how to stress test interest rates, lease-up speed, and concessions. For exits, we model cap rate expansion, not compression, and tie sale timing to the business plan. Along the way, we highlight the most common mistakes, understating expenses, overstating rent growth, and betting on an aggressive exit, and how to avoid them with simple, repeatable checks. If you want deals that work at today’s numbers and get better with execution, this framework will help you separate signal from noise in a fast-growing, maturing NWA market.
Enjoying the show? Follow, rate, and share to help other NWA investors find practical, no-fluff guidance. Have a question or want our underwriting tools? Send it our way and let us know what topic you want next.
Northwest Arkansas's go-to show for real estate agents, brokers, and investors looking to zoom in on the local market. Join us as we sit down with the leading voices in the area to hear how they're investing in NWA.
Hosted by (in order from left to right) Brian Wagers, Zach Stanley, and Brandon Still.
SPEAKER_00: Welcome to Northwest
Arkansas Investing Podcast, your
go-to source for real estate
investing in Northwest Arkansas.
SPEAKER_02: With your seasoned
investor just starting out, we
bring you expert insights,
market trends, and practical
strategies to help you build
wealth through real estate.
SPEAKER_01: From buying and
selling to property management
and long-term investment
planning, we cover it all so you
can make smart, informed
decisions in this fast growing
market.
Let's dive in.
All right, welcome to Northwest
Arkansas Investing Podcast.
I'm here with Mr.
Brian Wagers, my co-host.
And uh we just got done talking
through um deal structure and
partnerships.
And so if you if you haven't
listened to that one, hop back
over there.
We did a quick uh 15, 20 minute
segment on that.
And uh our next episode, we just
wanted to talk through you know
underwriting tips and uh just
how we're evaluating deals today
and with how the market has
shifted and with uh the effects
of inflation over the past five
years, um, and really just kind
of how how we look at deals.
And I think this is an episode
that I would have loved to have
in my back pocket if I was
getting started.
Um, but even just as an
experienced guy and kind of
hearing Brian how you're seeing
it, same thing with me and kind
of some of the smaller
multifamily and stuff like that.
And so uh I think you know
something you'll hear from a lot
of uh you know big names always
say Grant Cardone because I used
I've watched him for years, but
uh Grant always said that he uh
even when he wasn't able to buy
deals that he was underwriting a
hundred deals just to understand
it, you know, a hundred deals uh
a month or a hundred deals uh
every six months or whatever.
Um and so even you know, my I
would say just starting out,
even my advice would be deals
that come on the market in
Northwest Arkansas, a duplex or
anything that you see out there,
I would just encourage you to
underwrite it and understand
like is is this a deal?
A lot of what come comes on the
market nowadays, especially if
it's smaller multifamily, is not
going to make sense.
But I think it's important for
um for an investor to understand
that and understand what levers
are are being pulled today,
which we'll which we'll get
into.
But um, but yeah, I think just
from a market it check, real
quick, a market reality check.
Um, you know, I just went to the
Skyline report in uh Washington
County last week.
I know they've got the other
ones coming up, and then a lot
of that data will drop, which
we'll we'll talk about soon.
But uh everything you've seen,
where where do you see rents
trending in uh in Northwest
Arkansas?
SPEAKER_02: Man, that's a good
question.
I think it depends on A, B, and
C.
Um, and to really get a good
grasp on that is to do exactly
what you just said is
underwriting deals that are on
the market and deals that have
traded.
You know, that's what I first
did when I first got started in
commercial real estate.
I was on loop net and just
analyzing these deals that had
been sitting there for a while
and seeing what made sense.
Um and so same thing when I was
doing, you know, this when I was
going after my first single
family, I underwrote, you know,
20 deals before I I got that
first one.
So it's a great practice.
Um as far as where rent's going,
you know, A-class, there is a
lot, you know, anything that is
being built is is A-class.
It's hard, you it's hard to
build a C class product.
So there is a lot of A-class
coming online.
But at the same token, 36, you
know, people are moving here uh
I don't know, a day a day is
what the last statistic has.
So those guys are usually moving
here for Walmart, Tyson, JB
Hunt, University of Arkansas.
So it's a lot of white-collar
jobs, so they are wanting that
premium product.
They were they may not uh want
to jump into their first home.
They might want to get a feel
for the area.
They may only be here on a one
to three year stint, so they may
not want to buy a home and go
through all that.
So they're wanting for a nice
place to live and they're
looking for a new build rental,
whether that's a home or uh an
apartment.
So, you know, I think local
investors see the cranes in the
sky and seeing all this new
build come in.
It's you might think, oh man,
there's a lot, but you know,
they're it's getting absorbed.
You know, I we'll see on the
Skyline report.
Um, I think there was a
softening on the A-class rents.
Um, you know, where it was,
rents were increasing, you know,
five to ten percent a year or
more um on some properties.
I think right now I would
underwrite for three percent
rent increases.
Now where you start that is
really just depends.
Um, you know, I think for A
class product you're seeing
around two dollars a square foot
on uh rental, um, you know, for
C class, you know, and C class
in Fort Smith, it's a dollar a
square foot.
Yeah.
Um C class and NWA, you know,
anywhere from there to a dollar
fifty or more.
So it really depends on what
submarket you are in, if you're
in Fayville or in Rogers, and
Reno Rogers ranges quite a bit
too.
And so does you know, so so does
every submarket.
So what are you close to?
I would really dive in on your
comparables.
So I, you know, any kind of deal
I'm doing, I'm doing my own
market survey.
So I'm looking at all the
comparable properties to me
within one to one to five miles,
you know, preferably one mile to
three miles, you know, but I'll
have some comparables to go out
further.
Sometimes you might not have an
apples to apples comparison.
You might, you know, be having a
you might have a 2000 year, you
know, something that's built in
2000 and everything around you
is 1980s built, so you might
have to go back, yeah, go a
little bit.
So I would suggest, you know,
almost looking at okay, what are
these these older properties
that are renting very close to
me, and then what are these
newer properties achieving that
are a little farther out, and
try to come up with somewhere in
between there.
So there's still a large demand
here and in WA.
You know, I've seen this uh the
Whole Foods Apartments projects,
those are coming online.
Um it's like Alta or something,
Vista at Alta.
You know, I I was looking at a
Rogers project here recently.
Um, you know, the the rents were
everywhere from$1.60 to like
$260.
Um but that and and then there's
the Northgate um new apartment
complex going by Ruth Chris.
Um that they had an advertise
for$260.
But if you dive in, they're con
they're offering a thousand
dollars off the first two
months.
Yeah.
So that's gonna hurt your
overall, you know, you're giving
up a lot to concessions and
leases.
So you're seeing a lot of that
with the A-class product.
There's a lot of concessions and
lost a lease.
So you have to factor that in on
the new new product.
SPEAKER_01: Yeah, absolutely.
And I've even started to see it
a little bit in uh in like B and
C class stuff that just offering
maybe first month rent-free um
on a 12-month lease, which which
I don't think we've seen in a
while.
So um still really interesting.
It went to the skyline report
too, which again we'll talk
about a lot of that data coming
up, but uh vacancies still
continue to be really low, uh,
especially in areas like
Springdale specifically, um,
which I know you've got a deal
coming up there, and then
Fayetteville is still very low
in that in those one, two
bedrooms specifically, um, and
then even three-bed for the most
part.
Both of those cities are super
low.
So um it'll be interesting to
kind of continue to see, but I
know rents with vacancy being so
low and there not being that
many units, um, and a lot of
these units that are being built
are being absorbed, rents just
kind of can you know naturally
are going to continue to climb
uh slowly, and I think it's good
to have that conservative look
around two to three percent.
So uh when it comes to expenses
though, so we talked we talked
about rents and kind of what you
know what we're seeing there.
When it comes to expenses and
when you're underwriting a deal,
um and looking at what what that
looks like, um a lot of times
you know you can use calculators
out there.
Bigger pockets has a calculator
that a lot of people use uh when
you're underwriting deals, and
they have like an insurance
calculator on there.
You can basically use the you
know, which obviously is not
going to be the most accurate,
but at least give spits you out
kind of an idea of what
insurance will be.
But um you can plug in details
about the property, maybe roof
age, uh, you know, unit age,
stuff like that, and then it'll
spit you out kind of an
estimated insurance quote, so
you can uh you can kind of be
able to underwrite a little bit
quick more quick or quicker on
that.
Um and then property taxes,
payroll, some other stuff like
that, property taxes
specifically, too.
Um how do you look at that when
it comes to let's just say
you're looking at a smaller deal
first, and property taxes are
maybe showing, you know,$2,000 a
year.
How do you how do you look at
how you input that into your
underwriting?
Because obviously when it
trades, it's gonna be reassessed
at some point in the next year
to two years.
Um, are you do you project that
in your underwriting or or do
you plug in what's what's
currently there?
How how do you look at uh stuff
like that?
SPEAKER_02: Yeah, 100% do not
plug in what's currently there
on insurance or taxes.
Taxes and insurance are gonna be
your biggest you know deal
killers, I guess you could say.
Um definitely account for both
of them to come up.
I would get I would try to have
a couple live insurance quotes.
I would I would get insurance
quotes um on some properties
that you're looking at to get an
idea of what what they're gonna
be at.
100% increasing that.
Um property taxes, anywhere from
30 to 50 percent increase from
what the previous was, depending
on how long they've owned it.
They may have an incredible
basis where their their property
tax is still based on, you know,
hasn't really increased yet.
Arkansas is good for it, you
know, it's some other markets
where it's you know 30% of the
assessed value.
You know, I think you know,
maybe lowest 15%, uh size 30%.
So definitely increase of
property taxes, increase
property insurance, and you can
even get uh consultants on that.
SPEAKER_01: Yeah.
SPEAKER_02: I kind of smiled
when you said the bigger pockets
uh calculated.
I used to use that.
I mean for our for development
deals, I I pay an analyst, you
know,$250 an hour to analyze,
like an institutional analyst to
to go over all assumptions and
to really build out a model for
each project to account for um,
you know, the construction
period, to account for the lease
up period, to account to have
different scenarios if
construction costs are up or if
rents are at X, what happens
here?
You know, to run different lease
up schedules.
Um what happens if we're leasing
five up a month or ten up a
month?
So um your level of uh
underwriting can really change.
But there's a there's a lot of
good um models out there.
I would use different ones.
I think um as far as for
expenses go, you know, insurance
and property tax are the big
ones.
Definitely want to account what
I see very commonly for the
smaller ones is it's a mom and
pop run property and their
expenses are very low.
They're not putting much into
unit, they're not accounting for
unit turns, they're not
accounting for paying property
management or payroll, so that's
not on there.
So sometimes these guys are
running it at 30% expenses, but
in reality, when you take over,
you're gonna be putting more
towards these units as they
become vacant.
Um, you're gonna be putting in
professional property management
unless you're managing it
yourself.
So, you know, as I've seen as
low as 30% for new but like
realistic new build, like brand
new 2025 build, you're not gonna
have you know turn like turn up
for that first year or so.
You know, it's gonna be very
minimal.
So 20 30% is seen in the market
as kind of the base for a new
build, anywhere from 30 to 35
percent.
And then, you know, I I've seen
expenses as high as 55%,
depending if the owner is paying
for utilities.
In Northwest Arkansas, much more
common for the renters to be
billed back for water and
electric and cable, or even set
it up themselves too.
So you definitely want to get
clarity on that.
SPEAKER_01: Yeah, that's a great
point.
Uh something that I've run
across a lot lately with uh some
older properties, uh, you know,
C class for the most part, is uh
you know something that they
typically aren't like talking
about openly or have that on
maybe sometimes don't even have
it on their PL is is uh you know
like water like utilities
specifically.
Maybe they are all they're not
individually metered on their
water or something like that,
but they're you know, so the
owner pays for that, but they
sometimes they charge back
tenants for it, sometimes they
don't.
Like that, those are things to
be thinking about as well.
Um and we'll get into some more
expenses, but you know, things
to look out for, stuff like
that.
But I thought I I just thought
of that kind of from that, and
and uh I think yeah, that takes
us exactly to the next point.
SPEAKER_02: So what to gather
for this whole underwriting
process.
And and the first thing is how
the property has performed the
last 12 months, and how is the
property performing today?
And so what you're gonna get is
what's called a T12, which is
the trailing 12 months uh of
profit and loss, um, and what
the current income is today, and
that can usually be shown with a
rent roll or with leases.
So you're gonna see what it is
today and how it's performed the
last 12 months.
If you want to do a deep dive,
you could even go 24 months and
36 months to really uncover
some, you know, maybe they had a
huge water expense.
You might find out there was
some plumbing issues if you go a
little bit further back.
Um but that's the first step is
how is the property performed
the past 12 months and how is it
performing today?
SPEAKER_01: Yep, and and again,
just look into and and with some
of the calculators that you may
use out there or models, um,
there will probably there will
likely be a section where you
can, you know, well what does
the property look like at
current rents?
What does the property look like
at market rents?
Um if you don't have a
calculator like that, uh email
Brian or I.
I've got one for sure I can send
you.
I'm sure Brian does as well.
Happy to send that to anybody
for free.
Um, but yeah, number one would
be understanding your rent cops,
comps, how the property's
performed the last 12 months at
least.
And then from there, kind of
building out a pro forma income.
Brian, for those that don't
know, what does a pro forma
mean?
SPEAKER_02: Yeah, it's it's a
projection of how you're going
to run the property.
It's pretty much a business
plan, you know, in an Excel
spreadsheet or whatever model
you have.
It's how we expect to stabilize
expenses, or, you know, in some
cases, what how are expenses
going to go up and then how are
we going to boost income?
Yeah.
So you're going to want to look
at how you can look at how it's
being run today, and that can be
your start.
And you might see these guys are
charging an average of twelve
hundred dollars in rent, but
market clearly says we can we
can charge fourteen hundred
dollars for the same thing.
What I commonly see also is they
say, okay, all of these, you
know, 12 units or that's gonna
happen day one.
This commercial property now is
uh all of a sudden at our pro
forma rent.
So you want to make sure that's
gradually coming in, whether
that's three months, six months,
twelve months, you know, I think
twelve months is reasonable.
It depends on uh how long the
current leases are, how long the
current renters are in there
for, what's their current
agreement?
Is it month to month, or are you
going to just be stuck with them
for a little while?
So you can't really push that
rent.
And sometimes you're gonna have
to make improvements too.
So once a resident gets out,
then you have to come in and
make those improvements to the
property, and then you have to
fill someone else out there.
So it's not gonna be day one,
you close on the property and
they were charging$1,200, and
now all of a sudden it's$1,400.
You know, you want that pro
forma should show it being
gradually brought in.
SPEAKER_01: Yep, that's a great
point.
And and then one other point to
that too, uh uh something to
watch out for, Brian.
I'm sure you've seen this all
the time.
But um, you know, what you'll
see out there, let's say a
property comes up on the market.
Um brokers will oftentimes be
marketing their pro forma.
Uh, maybe it's a pro forma six
cap or something like that, um,
or a pro forma, what the pro
forma would look like, and not
really, obviously, they want to
show what it could be and not
maybe it maybe you have a
property that's way
underperforming in in rents and
things like that.
And that's really what you want
to dig into first and then kind
of start to to back into it,
understanding market rents and
and look what a pro forma could
be.
But just something to look out
for as you're through that
underwriting process.
And then just like another
another big item, this is gonna
be one of the biggest, in my
opinion, is uh expenses and and
just kind of layering those in
conservatively.
Some things that come to mind
here maybe are our management
fees.
Um, you know, maybe some
beginner investors will be
looking at deals with a 0%
management fee because they're
gonna do it themselves.
Um, I I would recommend even
underwriting it with management
fees because most people, you
know, maybe won't have the time
to manage it themselves and
stuff like that.
So that could be something that
could be anywhere.
There are uh shops out there I
think that will do it for pretty
inexpensively.
Um I think it's an area that is
super important though, and you
get what you pay for here.
You could probably have a lot of
management.
I've seen management fees out
there that will do it for four
to five percent, and others that
will be up to ten percent, or
maybe maybe there's they go
higher than that.
But this is an area this is
gonna that will be one of your
number one partners in the deal,
um, and and that are gonna kind
of help you continue to stay
upon those those market rents.
And typically, if they're a good
manager, they're gonna they're
gonna pay for themselves.
And then just some other things
that that I think about, Brian,
you can add to this on the
expenses piece, but something
that I see I think a lot of
people don't underwrite for,
especially the beginners, are uh
maintenance fees or excuse me,
maintenance uh just I guess kind
of a set aside money for
maintenance, uh just common
maintenance that's gonna come
across units, and then same
thing for vacancy, reserves for
both of those.
Um obviously those aren't things
that are you know to you close
on the property and tomorrow
you're gonna have an expense
for, but I think having reserves
for maintenance and having
reserves for vacancy is
important.
What are your thoughts on those?
Are those common items that
you're also underwriting with?
100%.
SPEAKER_02: You're gonna have
your day one CapEx, what we're
doing to spruce up the apartment
or commercial property or single
property, single family or
whatever it is, you know, um,
you're gonna come in, hopefully
spend money right away so the
residents know that you're there
getting new ownership.
Um but like you said, you know,
the maintenance, also known as
CapEx, you want to set aside
money for CapEx unforeseen that
that are gonna happen.
And that that's gonna be unit
turns, that's gonna be HFACs,
that's gonna be, you know,
possibly new roofs depending on
the age.
And you're wanting to set that
aside um every month.
You know, it's not a bad idea to
have a maintenance replenishment
where a certain amount of your
income is going towards you
know, a capex budget for that
rainy day where you might need
it.
Um hundred percent on what you
said on the management, make
sure you're adding that anywhere
from three to ten percent
depending on the type of
property, you know, single
family being the highest uh
percentage, and then lowest, you
know, large tenant-based uh
property.
SPEAKER_01: Yeah, that's a good
point.
And then just some just some
other items that we're looking
at typically in the underwriting
process.
You know, an item that I think
will be really important to
banks typically is your DSCR,
which would be your debt service
coverage ratio.
Um you know, a number that
you'll see out there a lot is
1.25 debt service coverage
ratio.
I guess number one, Brian, just
in layman's terms, how would you
explain that to a to a uh
beginner?
SPEAKER_02: Yeah, so debt
service coverage ratio 1.25
means that you're you have 25%
of income over all your debt and
expenses.
So if you're cut you're you're
covering your expenses, your
utilities, your management fees,
um, and the debt payments to the
bank, how much extra are you
gonna have at the end of the
day?
If all that's a hundred thousand
and you're bringing in
twenty-five thousand dollars of
cash flow, that's a one point
two five DSCR.
So usually banks want to see
that you're able to cover all
the expenses and their debt
payments at least with a 20% to
25% gap is what I've seen.
1.2 to 1.25 is is going to be
the minimum.
So um same thing on the investor
side.
You want to make sure that you
have that for you know, again,
for that rainy day cushion um
and for cash flow for you, for
your investment.
You want that distributable cash
to um get start getting your
money back.
SPEAKER_01: Yeah, absolutely.
And I think I think that's a
great, great point, and and
something that you're gonna want
to be able to go to a bank and
say, you know, here here's the
financials, here's the pro forma
of kind of what we expect it to
perform at once we have it
stabilized.
Um, and that kind of gives us
that DSCR, that debt service
coverage ratio that we talk
about, which will again will be
an important thing for the
banks.
SPEAKER_02: And that can change
to from your day one DSCR to
your stabilized DSCR, where you
have once you've spent that
money and once you've increased
those rents, that can jump up
quite a bit.
SPEAKER_01: Yep, absolutely.
And then uh I think kind of one
of the biggest last things that
we were looking at when it comes
to the underwriting process is
is uh just looking at you know
what is our exit and and kind of
understanding, hey, this is this
is a business plan.
We're putting together a
business plan to show the bank
and to show our investors if
there are partners in it, and uh
and how how do we expect to get
out of this if we you know is it
if it's gonna be in three years,
if it's gonna be in five years,
if it's gonna be ten or more
years, um understanding your
your cap rates and what that
exit looks like, I think is is
really important.
SPEAKER_02: Um yeah, cap rates
definitely want to stress test
different cap rate scenarios
that you know a lot interest
rates have a lot of uh upward
and downward pressure on cap
rates, depending on what the
next buyer is going to have to
borrow at.
The type of asset is gonna be
have a big factor in that.
If it's a brand new build, you
know, your cap rate is gonna be
lower.
If if it's you know right by
Walmart's home office and it's
in Bentonville and it's brand
new, like you know, you're
probably paying a pretty low cap
rate.
I've seen this below four caps,
you know, and as high as ten cap
in a you know market like uh
Memphis, Tennessee, where it's
above that ten cap or where it's
a different type of asset where
it's uh mobile home park, you
know, those might, you know, the
appreciation is going to be
harder there, but you should be
getting more cash flow on those
type of investments.
SPEAKER_01: Yep.
And then you know, for those
that don't understand, cap rate
would be your capitalization
rate.
And so if you were to what
really what that means, if you
were to buy the property cash,
what would your return be?
And uh and I think as an
investor, understanding what cap
rates are for certain types of
asset classes, if it's you know
commercial uh or if it's you
know small multifamily or or
whatever, and then you know,
depending on the asset type, if
it if it's A class or B class or
C class, and then even looking
down to certain areas, you know,
something in in Springdale, the
cap rates in Springdale um are
obviously going to be a lot
different than your cap rates in
in Biddenville or your cap rates
in Fayetteville.
And so I think as an investor,
as you are underwriting deals,
um, it's gonna be really
important to kind of understand
what those look like so you can
know what your exit could be um,
you know, with that business
plan.
So yeah.
Um Brian, just as we wrap up the
this piece, I think we could
talk about this all day.
Uh uh underwriting is is such an
art, and I think a lot of
investors need to really
understand it.
Um but what what are some common
mistakes that uh that you've
maybe seen in business that
you've done in the past or or
maybe others around you um, you
know, that you feel like they
underwrite a little bit too
aggressively, what do you
normally see as the are those
kind of shortcomings?
SPEAKER_02: I would say um three
things underestimating expenses,
um overstating rent growth and
overstating that rent growth too
fast, you know, saying, you
know, I think we can turn this
property around and get rents to
X, making sure that's that's
spread out a little bit, and
then um your end sale price
assumption uh being too high.
Making sure you want to stress
test different cap rates, making
sure even if the cap rates do go
up that your deal still makes
sense there.
SPEAKER_01: Yeah, absolutely.
And I think uh I I really like
what you said about
overestimating rent growth.
I think um, you know, obviously
if you're if you're just getting
started or maybe you've been in
the game for a little while, we
have seen some outrageous, you
know, rent increases over the
past five years.
And uh and just for those that
are looking to do deals in the
future, I think it's gonna be
important to understand
historically what rent growth
has looked like.
It's not gonna look like the
what we've seen in the last five
years.
Um, but it's a result of you
know, we've we've seen the the
government print 40% of our
money supply in the last five
years, which is insane.
So you can imagine that that's
obviously going to have an
effect on our rent now.
Um, and it's probably safe to
assume it's probably gonna be
closer to what the inflation
rates are today, you know, two
to three percent in there,
something like that.
Is that kind of what yeah?
SPEAKER_02: I I would say for
me, like I I want to make sure
this deal makes sense at today's
rents.
Like if it makes sure uh if we
assume that rents aren't
increasing and it's just the
market rate, I want to make that
the deal needs to make sense of
that and then push rents from
there.
SPEAKER_01: Yep, agreed.
I like what you said down here.
Good underwriting keeps you out
of out of trouble.
I think uh really understanding
the best case scenarios and and
worst case scenarios and being
able to live with those
worst-case scenarios if they
happened and it wouldn't put you
in a bad spot is really
important.
Um I think even on top of that,
nowadays, especially I think now
is about is uh you know, more
than ever is the is the time
where I think it makes sense not
to be fully leveraged to the to
the nines.
Um, you know, it with the way
kind of the economy has
continued to fluctuate up and
down and and uh what we've seen
and and how kind of how how
rates may look in the next few
months.
Um I think it's probably a smart
play to you know 25% down, 20%
down.
A lot of these banks are are
requiring that nowadays.
And uh and so I think
understanding number one, not
being too leveraged, but number
two, understanding
conservatively, um, you know, is
the deal a good or is it, you
know, do you need to pass and
not being emotional about those
things?
That makes sense.
SPEAKER_02: Yeah, 100%.
Leverage is a whole nother topic
we could get into as far as you
know, what's the right amount of
leverage?
I think it's just make sure your
underwriting is sound and make
sure whether you're doing the
underwriting or whoever you're
working with is doing the
underwriting is getting real
mark like real-time feedback.
Where are they getting as that
have they talked to these
insurance agents?
Have they talked to any tax
consultants?
Have they talked to property
managers?
Have they talked to other owners
and making sure that's real
time, not too hypothetical?
SPEAKER_01: Yep.
Love it.
Well, we uh I think this is such
a good episode.
We could go on forever about
this and underwriting and kind
of um kind of continue to go
into that.
But if you have any questions
and want to reach out to Brian
or I on what you know how we
underwrite, what tools we use,
we're happy to to help um you
know send out the tools that we
use, and uh, we're happy to kind
of be a be a uh sounding board
there for for anybody that needs
help there and and is just kind
of thinking about wanting to uh
kind of go in here.
So thanks for listening to
another episode of Northwest
Arkansas Investing Podcast, and
uh, we'll see you next time.
SPEAKER_00: Thanks, guys.
Again, thank you guys for tuning
in.
I'm gonna go ahead and uh list
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SPEAKER_01: Have a question you
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