Join Attorney Jonathan Gilmore In this Legacy Series episode of The RED Podcast, where attorney Ferd Niemann discusses underwriting assumptions for your profit and loss and your day 1 budget. Ferd explains step-by-step how you can budget effectively and why it’s so important to get an accurate read on your budget.

0:00 – Intro
1:55 – The first main area to consider is profit and loss
3:24 – The biggest problem with a construction budget is not a misprice, but a missed price.
5:26 – The industry standard is a 30% expense ratio if the tenants pay the water sewer, and about 40% if the landlord pays it.
5:57 – Ferd likes to refine his numbers to put together the best offer possible
7:52 – Ferd explains the basic profit and loss formula
8:58 – Renters typically stay about 2 years compared to mobile home owners who stay for around 8 years
9:28 – Ferd takes us through big misses on operating expenses
23:16 – The day one budget can be done from photos and videos or your initial visit to the site
23:30 – Ferd takes us through the key items for use of funds