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Rick Ofman has over six years of experience in commercial real estate and is a Director at Essex Realty Group.
Rick kicks things off by defining underwriting and associated terminology. He provides a thorough breakdown of income, expenses, and necessary assumptions. Rick shares insight on forecasting variables such as rehab costs, rent increases, and tax increases to name a few. He explains some valuation terms such as gross rent multiplier (GRM) and cap rate and the impact that interest rates have on these metrics. Rick closes with a bullish outlook on projected rent growth in Chicago and emphasizes the importance of teaming up with a broker that is transparent and has your best interest in mind!
Watch Straight Up Chicago Investor Podcast Episode 189 in Full Here
Questions We Answer In this Show:
Q. How to underwrite multi family properties In Chicago?
A. Video
Q. What is the GRM approach to value an investment in Chicago Real Estate?
A.Video
Q. What you must know about calculating building expenses as an investor in Chicago.
A. Video
Show Notes:
04:40 Housing Provider Tip: Consider hiring a process server to best utilize your time!
07:34 Intro to our guest, Rick Ofman!
09:24 What is the definition of underwriting?
10:54 Rick discusses making assumptions and explains other variables during underwriting!
19:54 How are expenses underwritten?
23:18 What are some additional underwriting considerations when evaluating C/D class properties?
02 One piece of advice for new investors.
54:26 What do you do for fun?
54:34 Good book, podcast, or self development activity that you would recommend?
55:30 Local Network Recommendation?
55:50 How can the listeners learn more about you and provide value to you?
23:57 Rick explains “hard” and “soft” costs!
32:37 How can buyers accurately determine utility costs?
34:34 What is the next step in underwriting after determining income and expenses?
46:09 How have rental “seasons” varied over recent years in Chicago?
50:02 How is Rick forecasting expense increases for buyers/owners?
52:42 What is Rick’s competitive advantage?
54:02 One piece of advice for new investors.
54:26 What do you do for fun?
54:34 Good book, podcast, or self development activity that you would recommend?
55:30 Local Network Recommendation?
55:50 How can the listeners learn more about you and provide value to you?
Guest Name: Rick Ofman
Guest Company: Essex Realty Group
Guest Link: https://essexrealtygroup.com/team/rick-ofman
Other Links for show notes:
Chicago Investor Resources Shared
What You Must Know About Renting Your Property In Schaumburg
Survival Guide For Self Managers - 15 Tips Chicago Landlords Must Know(Especially House Hackers)
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