“I never underwrite to a lower cap rate… if cap rates increase, you totally miss your mark.”
Frank Patilano · Ironclad Underwriting Podcast · Two Underwriters, One Deal: Why Real Estate Valuations Differ
Play from 21:39
21:39
Audio streams from the publisher’s own feed. Verbatim does not host or copy it.
What was described
Advocates not underwriting to a lower cap rate even if market forecasts suggest it
Said nearby on the same subject
“At a 5% cap rate, essentially… for every $1 of rental income, we're getting 20 times that in valuation… if the lower it goes, so if it's a 3% cap rate, $1 of rental income is worth $33 in value.”
“We ran a regression of the forecasted Fed funds rate onto forecasted inflation and forecasted output relative to potential… on this different data, forward-looking data.”