What is PROPER underwriting process like for development projects
Recently joined a boutique developer in Toronto focused on the purpose built multifamily rental space. I'm from a corp banking background so CRE is new field for me with good amount of learning. The firm has some good projects/lands ongoing in the pre-approval entitlement phase.
I work with a small team responsible for the underwriting, financial analysis and capital raising aspect of the business and projects. So far have mostly been dealing with HNW type of lenders/investors who aren't as sophisticated based on the various diligence sessions I've sit through.
Ultimately, the firm/project portfolio will hopefully scale to a point where we raise capital from institutional guys incl. REPEs and REITs. By that point, I want myself to be able to answer any questions from these folks across the table in an intelligent manner. Short/near-term question is, how do I get there, in particular in an environment where no structured training is present?
Hence would like to leverage fellow monkey's knowledge, experience and guidance on the following as a start:
1. How do you properly underwrite a dev project (focus on multifamily rental)? A full explanation or documentation of the u/w process, e.g. what metrics, comps, etc would be analyzed, is most helpful
2. What are the key considerations when analyzing a multifamily rental project, from the perspective of a developer or acquirer (for either a development proj or stabilized property)?
3. For those in REPE and similar buyside, what goes into your investment memo?
4. Any other relevant guidance would be very much welcome.
Lastly, any Toronto-based monkeys, look forward to connect offline.
Appreciate all the feedback in advance!