Rent Growth

When experts have said go right, we decided to go left in relation to rent increases. We have underwritten our deals at 0% rent increases during the first year with a considerably lower increase moving forward. Yet, we have still succeeded up to 20% rent growth.

Vacancy

To date, September 16, 2020, our property is only 4% vacant. With that said, the submarket average occupancy is 6%. Yet, we assume an 8% vacancy during the hold period.

Bad Bebt & Deliquencies

In our underwriting, we expect a 29% increase in bad debt for operations in the first year. Our property’s bad debt has been 1.7% in the past year and 1.2% for the last 30 days.

Cash Reserves

Fratelly Capital is raising capital for cash reserves at roughly $1 M (depending on the size of the property) to justify for any significant changes in the economy in the nearby future that may negatively influence income and operations.

Income Generating Items Excluded From Underwriting

Our underwriting strategy does not include items that call for immediate increases to the property’s income. For example, valet trash, carports, and bulk internet, etc.

NOI Growth

Although we intend to increase the properties NOI in the first year.  We underwrite it with 0% during the first year of operations.