Harder to model? Acquisitions or Development?
What’s harder to model & why?
Acquisitions or development?
(Specifically for Multifamily) Seems like development might be slightly harder?
What’s harder to model & why?
Acquisitions or development?
(Specifically for Multifamily) Seems like development might be slightly harder?
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I assume you mean acquiring a stabilized asset vs underwriting a development opportunity. The development costs side is a layer that a stabilized asset will not have unless doing value add, but even then you’re estimating costs on something that isn’t even designed yet, hence starting with large contingency budgets and pairing down as more information is determined and you can more accurately estimate your costs.
Development will be by virtue of having more stages to be modelled out, but both are very easy to model. RE models do not need to be complicated.
You can do all the modelling for a stabilized multi acquisition on a post it note.
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