We’re seeing a lot of Fund Managers who just want to raise capital and invest in others’ deals, without understanding the underwriting.
In our opinion, this is a path to disaster. If you don’t understand the deal, and haven’t underwritten it yourself, how can you know if the deal makes sense, or has a chance of meeting the projections claimed by the promoter? Not only might you be putting your investors’ funds at risk, there’s a good chance you’ll do a whole lot of work without receiving any compensation yourself. It’s simply not worth the risk.
Our New Year’s Mantra for real estate investors for 2026 is that if you don’t know how to do it already, ”Learn How to Underwrite Deals.”
Don’t assume others are analyzing the financials for a deal correctly.
Learn to spot flaws such as omitted expenses, over-optimistic income projections or timelines, lack of contingency funds, or lack of experience on the asset management team. All of these can be deal-breakers.
Don’t assume others know what they’re doing when it comes to underwriting a deal. If a deal doesn’t meet your criteria, after your thorough analysis, then it’s not a worthy investment for your investors or for you.
If you need help underwriting deals, here are a couple of resources: http://commercialunderwriter.com/
(software that underwrites all types of commercial real estate), and Despard Analytics at https://despardanalytics.com/ (their team does the underwriting for you).
