Modeling unit turns: How detailed do you get?
For those modeling value-add multifamily -- how detailed do you get with projecting out the turn schedule? Is your revenue build based on a simple occupancy estimate or is it based on a schedule of all units and what cycle they're in (e.g., in-place/below market, under renovation, or renovated and at market)? If the latter, how detailed do you get? Are you modeling every individual unit or grouping them by either unit type or floorplan?
More detailed the better. Most institutional properties have rent rolls that break out reno status for each unit and you can assign different rent premiums, turn costs, and renovation costs from there.
If your company doesn't already have it, I'd consider getting a trial for RedIQ, which is a very useful tool to parse rent rolls and analyze unit mixes based on floor plans and renovation levels.
Our process is fairly simple - we look at average number of units we think we can turn to market annually and straight line that number over the 12 months. From there we bake in an average cost of buying out below market tenants, average cost of renovations, and average unit downtime.
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