What makes one investor's offer stand out over another's—even when the numbers look the same?

 

In this episode, Angel hosts Fernando Arias and Anna Latysheva for a detailed walkthrough of how underwriting variables impact real estate valuations, investor returns, and bidding strategies. They examine the unseen levers—like DSCR, interest rates, amortization schedules, and capital expenditures—that can shift IRRs dramatically. With real-world scenarios and expert commentary, this episode provides valuable insights for both novice and seasoned investors navigating a tightening lending environment.

 

 

[00:01 - 04:14] Why Debt Terms Change the Game

• The significance of DSCR in determining actual loan amounts—not just LTV assumptions
• How interest rates and loan terms affect down payments and investor returns
• The need to build strong banking relationships for accurate underwriting inputs

 

[04:15 - 08:44] The Impact of Amortization on IRR

• What amortization periods reveal about monthly debt service and deal feasibility
• Why a higher down payment reduces IRR—even if the NOI stays constant
• The importance of recalculating purchase offers based on updated debt quotes

 

[08:45 - 13:28] Expense Assumptions That Can Break a Deal

• How slight changes in operating expenses significantly affect valuation
• The importance of classifying capital expenditures below the line
• Why expense accuracy is essential in low-cap markets

 

[13:29 - 18:00] Income Projections vs. Market Realities

• Why underwriting based on realistic rent comps boosts your competitiveness
• The significance of local PM data over online averages like Rentometer
• How fluctuating lending terms can lead to broken contracts

 

[18:01 - 23:40] Cap Rates, Risk, and Investor Psychology

• Why understanding cap rate spreads is essential for valuation decisions
• The relationship between NOI, cap rate, and perceived asset risk
• How market psychology and alternative income streams influence investor behavior

 

 

 

Connect with Anna:

 

LinkedIn: https://www.linkedin.com/in/ibuybuildings/

 

Connect with Fernando:

 

LinkedIn: https://www.linkedin.com/in/fernandoapartments/

 

 

Key Quotes:

 

“Just because your pro forma shows a 1.89 DSCR a year from now doesn't mean the bank will underwrite that way.” - Fernando Arias

 

“Every $1,000 in NOI can mean a $20,000 swing in valuation in low-cap markets.” - Anna Latysheva

 

 

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