What a great article! It’s a short primer but it touches on the main topics one should consider when buying distressed or value add real estate. Obviously, one must do extensive underwriting, review everything (!), be continuously diligent and focused, and, most importantly, must be able to accept that the transaction may not make sense. The three biggest challenges in underwriting distressed properties: what is the true/actual upside, what is the timing involved to achieve the predicted returns, and what is real cost of improvements? If one can define and strongly question/defend these three issues you may be ok with your purchase…. 

 

 

Svikhart & Associates, a Salt Lake City-based real estate services company, focuses on asset management, brokerage listings and sales, and all aspects of a multifamily investment. Specific diligence regards property operations and strategies to maximize asset performance and value. Additionally, the firm assists owners regarding economic, financial and market factors that impact returns on investment. The firm targets ‘Mid-Tier’ assets which it defines generally as 10-to-60-unit properties.

 

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