How to Underwrite Commercial Deals Like a Pro
In this week's Office Hours, I'm walking you through my entire underwriting process using a real value-add industrial property in Denver, Colorado.
Starting with a $650,000 listing, I'll show you how I evaluate a property's potential, estimate renovation costs, research market rents, structure financing, and stress-test returns.
Using our CRE Central Pro Deal Analyzer, I'll break down how small changes in purchase price, rental income, financing terms, and exit assumptions can completely change whether a deal is worth pursuing.
Key Takeaways:
Finding opportunities others overlook: How I identify value-add properties using price per square foot, days on market, location, and redevelopment potential.
Estimating renovation costs: How I account for parking limitations, building access, tenant improvements, and construction expenses.
Underwriting realistic rental income: How I research comparable properties, estimate lease-up timelines, and factor in vacancy and leasing costs.
Structuring financing: Why I pay close attention to loan-to-value ratios, interest-only periods, and carrying reserves.
Stress-testing the numbers: How a $50,000 increase in purchase price and changes in financing terms can significantly impact returns.
Knowing when a deal works: How I evaluate cash-on-cash returns, debt service coverage, IRR, and equity multiples to decide whether an investment is worth pursuing.
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.
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We've already decided that we are going to be going for flex. I'm just going to go for industrial in general because if that's the case,
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then I might be able to find like a 30,000 square foot distribution building that I could easily demise up into a bunch of smaller flex buildings. And then where should we go? We did Amarillo, Texas last time. I was out in Santa Fe,
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not too long ago. Like, should we do New Mexico?
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Maybe you know. Let's try Colorado. I haven't done anything in Colorado in quite some time, so let's just go look in Colorado and see what is going on
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in that market.
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All right, we're gonna have to zoom in a little bit here.
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Okay, so Denver, obviously pretty major metro area. Let's do this. I'm going to go for price. I'm going to go to price per square foot, and I want to cap that at 100 bucks.
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I'm going to hide undisclosed prices. If I want something that's value add, I need it under 100 bucks a foot. And there's plenty of opportunities like that out there. Look at that. I mean, just in Colorado alone, there's 81 properties that are under $100 a foot. Here's one that's just looks like it's in Denver, $650,000 for 8,100 square feet. That's like a perfect candidate. All right, this feels a little too easy. So let's let's click on it. Let's see what we got going on here.
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Okay,
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371 days on market. What is wrong with this property? But I like the price right off the bat. I mean, we're looking at what is that? Like 80 bucks a foot, give or take.
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Okay, so one thing that I could see is probably a problem with it. It's eight to 10 feet tall.
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That's typically an issue. Most people like to have taller buildings than that.
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Let's see here.
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All right, basically no photos whatsoever. Let's see if the flyer has anything for
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us. All right, 2340 South Delaware. This is in Denver, Colorado. Industrial structure covered land play in desirable mixed-use submarket. See, I mean that's pretty interesting to me. Like, if this is a covered land play, or if this could be a good covered land play, that means it's in the path of growth. That means with this price per square foot today, I should be able to make it work
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as a value add, and then get to ride that wave of appreciation if it truly is a covered land play. They're having a call for offers on october 10.
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Considering that it's been on the market for 371 days, it sounds like they were just ready to get rid of it. So I bet we could get an even better price than what they are currently asking.
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Let's
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see.
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Come back over here. How do I get out of this? There we go. Okay, I'm gonna look this address up real quick.
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See what's going on in this market.
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I like to take you guys through my entire process on underwriting. That way, y'all can just follow along. If you wanted to, you can go find this exact same property, go through the exact same process that I'm doing. That way, you can you know get a better idea of how I underwrite, so you guys can get the reps in, start to do your own underwriting. Looks like we're just south of downtown. Pretty interesting area.
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I don't know anything about Denver? I've been there. I think one time, been to the airport a bunch of times, but I've only actually spent time in Denver a little bit.
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Looks like you're in you know kind of a residential looking neighborhood. There's a baseball field next to you. Looks like we're just off of a relatively major thoroughfare, which is almost immediately connected to another major thoroughfare for FlexSpace. That's pretty ideal because look how quickly we can get to the interstate. That's what Flex users want. They want quick access to the interstate. One
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problem.
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This can't be right. Is that right?
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Oh, this is Indianapolis, Indiana.
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That's the wrong street. All right,
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it happens, guys. We're doing it live.
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Okay, backing up.
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We are still south of downtown Denver, so everything else still works, still has very solid access. Like we're on a side street right off of a main street that has almost immediate access to the interstate. Nice to see. All right, when we zoom in here, one thing that immediately stands out to me is that there is very little parking and very little access on site. So what I'm gonna want to do,
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let's go over to Land Glide.
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If you guys don't have Land Glide, highly recommend you get this app. It's awesome. I use it all the time.
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I've got it on my cell phone,
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and we use it quite a bit. This it basically connects.
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To the tax records, it walks you through everything. Okay, so here's the parcel. You can see, I mean, the building goes to the property line. That is kind of a problem because there's almost no access whatsoever. It looks like you've got an alley in the rear. You've got the main street out front. It's probably one of the reasons that this has been sitting here for so long, see, like, look at this industrial building next door. Like, at least it's got parking in front. It's got access in the rear.
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Flex users tend to like having access to the space, so let's drop in here on Google Street View and see what we're looking at. Okay, it goes right up to the street. We've got three parking spaces.
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That is tough.
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So, like I said, that's probably a pretty good reason as to why it
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has not sold. Looking at it from the back,
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it goes all the way up to the alley.
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So, really, what you would probably have to do here is either find a tenant that is willing
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to-I mean, a tenant that just has a type of business that doesn't need a lot of access. Maybe it's storage.
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Maybe it's drop-off. Maybe it's something in between. Maybe it's a data center. I don't like. I don't really care for data centers,
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but as it sits right now, we would not be able to really park very many vehicles on site. There's a couple of ways to handle that, depending on the conditions of the building. You know, I might consider tearing down a portion of this and actually creating a parking lot. We're getting it at a cheap enough rate to where that would make a lot of sense for us to do. Now it does say that this same family owns the property next door,
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or this same trust does.
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So I wonder if they mention anything about that on the actual listing.
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Let's see, short-term income available, assemblage opportunity. Okay, so no. So this is strictly for the one parcel. We could buy this other parcel, which you might actually have to because it has the parking.
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Otherwise, I'm tearing a portion of this building down and I'm adding parking in.
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The problem is I can't really tell
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from Street View, and since they don't have any other photos of the building,
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I can't tell what I could tear down
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and what, or like what I should tear down. Right? Like, should we tear something down in the back? Should we tear something down on the front.
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There's not
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really a good answer. It looks like the front of the building may and be in better shape than some of the back.
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Might be a little bit newer, so maybe we're keeping the front. We're tearing down a portion of the back.
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So a parking space is basically
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eight feet,
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eight feet by 12 feet, maybe probably less than that. I mean, maybe maybe closer to like seven feet by 12 feet. Depends on how you decide to do it. But let's just say it's eight foot by 12 foot. That's 96 square feet. If I tore down, you know, roughly 1000 square feet on the back,
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then I would be able to.
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Well, didn't mean to do that. Then I might be able to add in some more parking spaces, so we wouldn't have to tear down too much. I'd basically have to go in. Let me see
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what this would look like. So,
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if I pull up layers and I go to more, I can actually pull up my little measuring tool. So from here
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to here is roughly 73 feet.
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So let's say that I just wanted to get 1000 feet, like I just wanted to get a row of parking spaces. I mean, I guess I got to go in, you know, let's call it 10 feet.
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So
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that's about seven.
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So if I tore down 73 feet by eight feet,
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divided by eight.
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I'm sorry, 73 feet deep
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times 12 feet. We really need 12 feet of depth, probably at least. It depends on your municipality on how you know big parking spaces need to be, but that gives us roughly 900 square feet that we're going to be tearing out of this building.
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I could add a garage door. We could not have you know 100% of these as parking spaces. There could just be access to some loading doors in the rear.
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So let's say
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if we divide that by 12 feet wide, or I'm sorry, eight feet wide, that would give us.
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Roughly 10 parking spaces.
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I'd say probably eight. So now we've got 11 parking spaces. We've got these three in the front. We've got eight in the back. Demo probably cost us 1015, bucks a foot. So we're spending probably 20,000 on demo at least
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maybe a little bit more if you take into account permitting and some other fees and just making sure that we're not damaging these other buildings. So we got probably let's let's call it $30,000 worth of demo there,
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and then we've got to rebuild it back.
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I'm going to assume another probably just $30,000, right? We're going to get some a couple garage doors. We're doing a block back,
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we're gonna have to pave. So
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I don't know. Let's let's just assume $100,000 for all of that, and then I would probably want to spruce up the interior. It's tough because we don't have any interior photos, so we don't really know what this place looks like. I wonder if there's no, there's nothing on Google that would show me. It doesn't seem like it's in terrible condition, but like as old as it looks on the outside, you got to know it's it's probably looking old on the inside.
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So I would say we're probably looking at.
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I mean, if it's 20 bucks a foot, we're taking out 1000 square feet, so that's 140,000. So let's let's assume that our capex all in is going to be around $240,000. All right,
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so let's jump into our underwriting calculator.
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You can check out the demo for this tool, by the way. You can get it for free.
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Crecentral.com/pro.
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This is the tool that we use on underwriting all of our deals. All right, so commercial. Let's do Colorado
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Flex Value Ad
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Building Square Footage 81 and four
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year built doesn't matter acquisition date this is just practice so they are asking on this deal
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$650,000 I bet it's probably I mean, if they're doing a call for offers, it's been on the market for a year.
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Let's just offer 500,000,
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not 5,000,001. too many zeros. Let's offer 500 grand. We're spending 240,000 on capitalized rehab.
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I am going to do this as a well.
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No, we don't need that.
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Closing costs 1.5% Down payment, I'm going to assume 30,000, 30,030% Man, it is a morning. I haven't had enough coffee. Clearly,
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all right, 70% LTV
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interest rate. Those just took a jump this past week, let's assume 7% 20-year amortization. I'm going to go with a 10-year loan term just to make the calculations clean. That way, we don't have to come back and calculate like, okay, well, if we decide to sell
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right at year five or a little bit earlier or whatever that ends up being, we're not having to worry about our loan term right now. So I'm going to say 10 years, 1% loan origination fee,
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lender holdback. We're not going to do any of that. Debt service coverage ratio 1.25 times. Operating capital. I'm going to go on a monthly basis.
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Let's go for six months because it's going to be vacant when we take it over, right? We're going to be tearing out that back wall, fully renovating the building. There's some work that we're gonna have to do, so
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I am gonna do lender-funded soft costs. So we'll add that in here. Interest-only period, yes.
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I'm gonna push the lender for 18 months of interest only because we've got to go through. We've got to do all of this work. That's probably gonna take us six to 12 months, depending on what the permitting situation looks like in Denver. I mean, hell, it could take you six months just to get the permits pulled,
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and then it's going to take us some time to do all the build out. And then, of course, we want to start getting it leased out before full
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principal and interest kicks in. So, I would I would actually ask the lender for 24 months with the expectation that I'm probably settling for 18.
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We're not going to model a refinance event.
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Let's say, I mean, based on the width of the building,
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there's only one entrance in the front.
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I mean, we could have two entrances in the back, and we could probably
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add another entrance up here. Like there may be, you know, an opportunity for us to just add a hallway in here.
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So maybe I'll add $20,000 to our budget just to kind of shore that up a little bit. Let me come back up here.
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So let's say it's 260,000,
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so that we can add two tenants instead of one.
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So go two tenants.
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Remember, they were it's it's roughly 80 104 square feet, but we're tearing out 1000 feet.
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So
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I'm not gonna like I've got the 80 104.
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Contemplated in the full property size, but when it comes to the tenants, I'm only going to contemplate roughly 7000 feet. All right, so let's say Suite A, just 3500. I'm just going to split these in two.
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Let's go back to Cruxy and let's see
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what is leasing in the Denver area for flex space like this.
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So we'll come down here to
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industrial. We'll get rid of refrigerated and cold storage. Get rid of R and D. Those are just very specialized compared to what we're really working on. And then I'm going to zoom in to South Denver, which is kind of where we are, so I can get a better idea of what stuff is renting for over here. Looks like there's a lot of space available,
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80 spaces and 51 properties. If I come over here to the insights, it's going to tell me a pretty good idea of what my days on market should be. So 194 days, that's not bad. So even though there's a lot of space, there's clearly also a lot of demand. So I'm going to assume it's going to take us six months to get these leased up. So for closing on it today,
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we'll just add six months.
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We'll say april 1 to start. All right, now let's see.
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Asking rate per square foot
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on average is 11 bucks. It looks like nearly everything is coming in at that.
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So I would feel pretty comfortable
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coming in at 11 bucks. But let's see what else is available out there
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in that range. Okay, no pictures. First of all, it seems to me
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like all we need to do is take some pretty pictures of this space. It's going to make it very easy to lease compared to everything else. Nobody seems to be putting pictures on anything out here.
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At least not pictures that you want to see.
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Yeah, like that's old and dingy. They're asking 13 bucks a foot a year. This is like true warehouse space. They're asking 11 bucks a foot.
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Yeah, I mean, I feel comfortable at at least 11 or 12. There's a bunch of undisclosed rates,
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so let's just start off at 11 bucks a foot, triple net, and we'll come back if we need to change them. Term 60 months, 3% annual bumps every single year. We're not going to do a TTI allowance because I'm already spending the money to demise the space and spruce it up a little bit. That's what that 140,000 was for. Leasing commission 6% because we want to make sure that our brokers get paid. We'll give three months of free rent. I'll be nice.
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All right, Sweet B, basically the same terms, 3500 square feet, 11 bucks a foot net. Let's just say it takes us one month longer to get this one leased up.
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So we'll start it in May.
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Also a 60-month term, 3% one, no TI, 6% in leasing commissions, three months of free rent. Now, I'm also going to add in a baseline vacancy rate. If I can see
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what the average is in the market,
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then I'm going to go with that. I don't know if Cruxy supplies that or not. It doesn't look like they
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do. So typically, I mean, for flex space, you're you're really looking at like five to 7% but it depends on the market. So I'm going to say 5% What this does is is even though we've got the space 100 occupied starting next spring, we're still going to decrease our actual occupancy by 5% Why do we do that well. Every lender is going to look at your deal, even if it's even if you're buying like a single tenant net lease deal with Starbucks in it, and they are going to discount you, all right,
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based on what the market average is. So you want to just go ahead and underwrite this so that you're already taking it into account.
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Second generation assumptions. I'm not going to do detailed. Like I could break this out and go detailed on a per tenant space. They're basically already the same. I'm just going to say it's going to take us six months to fill it back with new 60 month lease terms. Let's do a 5% increase year over year, but then 3% bumps,
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no TI,
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6% leasing commissions. All right,
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and then operating expenses, I'm going to say that this is triple
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net, 100% is is reimbursable by the tenants. We'll just go with a 35
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opex based on the expected gross income. If I actually had the numbers on this deal, like if I was actually you know interested in buying this deal, I would call the broker
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and I would say, hey,
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you know, I need your actual operating expenses for this building. They could send those over, and then I could actually underwrite those in here.
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But 35% is a pretty good baseline. That's that's about where your expenses should be. Depends on the property, of course, but for the most part.
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Like rule of thumb, it's not going to work all the time, but that's a good one. I'm not going to do an asset management fee because I'm not raising capital for this one. This is a small deal, so we'll do it on our own. We'll save 25 cents a foot in capital reserves.
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I am going to do a cost segregation study on this because I want to make sure that I'm getting the tax benefit. So I'm going to come in here. I'm going to select industrial warehouse,
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and then it's going to automatically populate the the
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middle of the ranges that you can expect. Every building is going to be different, right? Because it depends on
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the the the five year property versus 15 year property, and then of course what what's actually available for bonus depreciation. So you'll of course want to get an actual cost segregation study
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done. Now, when it comes to an exit cap rate, I'm probably going to assume an 8% We're probably going for, you know, two local credit tenants. I mean, if I get one national credit tenant, then you know we might be able to exit this for like a 675, or 7% cap rate. But I'm not going to make that assumption right now.
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1% in closing costs, 6% in commissions. I want to exit this in year five.
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We're not going to do a prepayment penalty,
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sole ownership. I mean, I could. There's so many different like investment types and structures that I could do with this. From like an LPGP split, if I was raising capital, if I wanted to do a preferred return on a split, waterfalls with promotes, a European waterfall,
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but I'm just going to go with sole ownership for now,
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and then let's see what this looks like.
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1.4, 1.54 times equity multiple, not terrible.
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So we're looking at a 1.48 times debt service coverage ratio. That's pretty good. Now that is our that is our average over the deal. Our projected IRR is 9.6% It's obviously not that great, and then our annualized cash on cash return ends up being 10.8%
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So
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let's see here. Interest carrier reserve. It's telling us we've got to bring an additional $67,000 roughly to the table because we're going to be vacant for a while, right? We're doing all this work to it. We're gonna have to carry it in the meantime. So for that first year, give or take, we lose about $67,000, which is why it's telling us, "Hey, go ahead and bring that money to the table. Now, every year thereafter, we have a very strong debt service coverage ratio. All right. So really, what that's telling me for us to have such a strong debt service coverage ratio, we have a pretty you know strong amount of cash flow, but we still aren't hitting our equity multiple that we want
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because the exit's just not ideal, right? The the we're waiting for that big bump at the end and it doesn't really happen. That's because we've got an 8% cap rate in here. You see, if we were at a seven and a half percent cap rate, our year five exit would be substantially better.
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All right.
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Now this is interesting. If we're able to get a 7% cap rate, it says, "Hey, exit in year three. Like you should exit even sooner. Sometimes that velocity of capital, you know, you'll get a better IRR, but you won't get as big of a equity multiple. Just depends on kind of what you're going for. But a 1.54 times debt service, or I'm sorry, 1.54 times equity multiple, not exciting to me. That's not a deal that I would want to do. And again, we're already coming in at 500 grand. We know that there's a lot of work that we're going to have to put into this. We've got to split these spaces up into 3500 square foot spaces each.
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One thing that's probably taking a hit on us is that interest rate. That's never good. There's nothing I can really do about that.
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Let's let's see. I mean, these are going to be pretty spruced up spaces. We're going to have nice access in the rear. Let's see if maybe if I can get 12 bucks a foot. Now I don't like to just arbitrarily increase my rents until I get a number that I like when I'm underwriting, right? That's that is not a good way to underwrite. If I genuinely felt like I could get 12 bucks a foot, and I would have to go back in and do some more research now to see like how confident are we in $12 a square foot?
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We're almost there. I mean, we want it for for a heavy value add like this. We really want to be at at least two times equity multiple. So this isn't bad. I mean, we're getting a 17.6% annualized cash on cash return,
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and we're in the path of growth. You know, I mean, the other thing is too like
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maybe
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we're actually able to exit this at a 7.5% cap rate, not necessarily based on the tenants that we have or the net operating income that we will have in place, but because it's in an area where somebody wants to tear it down and build something even better. Well, then look at that; it starts to work, so I would go through here and I would start stress testing the deal, looking at my cash flows, seeing what makes sense, what doesn't.
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You know, like I mean, my debt service coverage ratio is strong the entire time. I might actually be able to bring more debt to the table. So let's go back and let's look at that. If I brought.
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If I got a 75% loan to value, instead
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we might be able to actually juice those returns a little bit.
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So my debt service coverage ratio drops to a 133 instead of like a one five. So that's a pretty substantial drop. We do need to keep that in mind in year three as we have some some turnover going through there,
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but oh, and my equity multiple drops substantially. Okay, so
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not good. We actually probably want to bring more equity to the table. Let's see what this looks like at 65% loan to value.
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This is why it's so important to underwrite. Like, can you imagine trying to keep all this stuff in your head? No, 144. Our
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interest carry reserve jumped up.
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So there you have it. I guess 70% is pretty much where it's going to be.
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30% down payment. 125. Let's see
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here. 12 bucks a foot.
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Yeah, I mean, there's nothing else that I would really feel comfortable messing with, right? That seven and a half percent cap rate should really get us there. And I think what's going on with the equity multiple right here is that we have tenant turnover, and it's calculating that equity multiple based on that. So let's go our
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cash flow.
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Yeah,
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so we've got lower cash flow in year five, which is why it's
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showing us a lower return. So one way to fix that, if you're going through the underwriting, like obviously you want to you want to be realistic with this, but if somebody is coming in
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and buying the building, you're not going to be timing it to where you have zero tenants in place, right? You're going to have tenants in place as you're going through this. So what I like to do is set this to a 72 month lease, right? That's six years, so that's one year longer than our.
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Desired sale date.
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So, oh man, it still doesn't work. Our interest carrier reserve is just too high. It's now $81,000.
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Let's see. So 81,000.
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Yield on cost negative point negative 1% or negative point 1% I guess that's better than it could be.
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Let's see here, gross potential rent, average occupancy.
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So you'll notice here our average occupancy is 86.4% That's going to be normal, even though we're 100% occupied. Because remember, I knocked off 1000 square feet when we built that parking in the back.
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So our net rental income 80,000,
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which is 3500 times 12, so it's basically 7000
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a month.
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Triple net operating expenses reimbursements 107,000. Then our operating expenses. Oh, I see what it's doing. So right now we're not getting credit
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because we do have it set to 8100 square feet. It is calculating our
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operating expenses on that, so let's just drop this 7000.
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It's going to fix our operating expenses a little bit. So you'll see
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here, so we're going through this.
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The
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triple net reimbursement right here of 30,002 82 should net out right here. The only reason that it should is because we're 100% occupied now. If I had one tenant move out, then this would the reimbursement would be 15,000, and my expenses would still be 30,000.
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All right, so that will be that. That changes the numbers pretty substantially.
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But our debt service coverage ratio still isn't where we want it to be. What is going on with that?
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We've got 30% down payment,
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1%
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Drop my monthly
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basis of reserves because the calculus. So, like this operating capital reserve will also take into account just what you actually need based on your interest carry, so you don't need to always fill this in. I just like to have that there just in case it will back you up as well.
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Let's see, 12 bucks a foot start date.
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Okay.
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All right. So they're at a 2.04 times equity multiple. All right. So at that point, the deal works. I would do the deal as.
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Sits right now, which means that for this building that they're asking $650,000 on, I would have to get it for 500 grand.
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I would have to put $260,000 into it. I think I think at a minimum you're dropping that into it.
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I need to bring 30% down.
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We need to get 12 bucks a foot. I have to get one and a half years of interest only. Like the problem is if if we if some of this starts to break like let's say we only get one year of interest only,
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let's say that they counter us and they only and they will only accept 550. Well, my capex isn't necessarily going to change, right?
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Let's say
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that we are able to get 12 bucks a foot though. All right, so we'll keep that in there.
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We'll continue to stress test this.
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If we look at that,
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look at how much that moved our equity multiple.
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Like our cash on cash, our annualized cash on cash is still fine, but our equity multiple dropped point two five times.
Unknown Speaker
That's just not worth it at that point. Like all we did was switch, you know, the $50,000, and then you know whatever that other the interest only period was,
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and it had a massive swing on our equity multiple.
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So there you have it. There's there's some value add commercial. If you're looking at these kinds of deals, also in the pro
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in the software suite that we have here. If you're if you're looking at these types of deals and you've never done construction and you're sitting there wondering like how the hell did he just run through all of those numbers in his head? I've been doing it for a while, so it is what it is. But you can come in here to the cost estimator. We've got this in our suite of tools. You actually enter in your state,
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your city and state. So like Nashville, Tennessee, for example,
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it will actually base your construction costs on average construction costs in your specific city and state. So it's very important that you put that right, because like Nashville, I think is just under the national average, but you know New York City, for example, is going to be well over the national average. So it will actually change. You can come in here and you can say, hey, you know, we're going to do a medium renovation. We're doing a full grat renovation. Like, if you just wanted something that's you know super easy and relatively straightforward, but even if you were just going to do a white box, right? Or maybe you're just doing you're converting to a restaurant and F and B. Like, there's a lot of stuff that you can take into account as you're going through this.
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Or you can actually get into the specific construction categories and start adding different items in here, and it will calculate everything for you. So if I if I just showed you like, hey, we want to do
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a medium renovation on 5000 square feet,
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it will select all of these construction categories for you, and you can actually go in here and see what those look like. All right.
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I select my property type. Let's say it's industrial warehouse,
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pre 1980s. Calculate my estimate. Look at that 197,000. I think I had budgeted like 140,000, but I wasn't doing a full gut. So, I mean, we're not far off. And look at that, Nashville's point nine two times. All right,
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so I mean the whole goal with this cost estimator is you want to be plus or minus 15% of what the actual cost is going to be. Obviously, you want to get a contractor in there, but this is going to give you a pretty close detailed breakdown of what you should expect as you're going through that type of renovation. That way, you kind of know what you're doing, and then I can attach it to the deal desk, and I can actually send this to my underwriting,
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so I can then apply it to my rehab, which is cool. So then I can open my inputs,
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and look at that-it's already in my capitalized rehab. So pretty cool. There you have it-all the fun stuff. Diving into FuckSpace and underwriting those deals. All right, let's look at y'all's questions. Jason saying good morning, sir. Good morning, Jason. Good to see you, man.
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He's saying I'm one of Tyler's students. Please send me your commercial or residential deals that you need help with. Let's JV guys. Jason's closing on a pretty badass residential deal that he was telling us about last night on our accelerator call. So if you want a good partner, reach out to Jason. Yardman saying hi, Tyler. What's up, Garden Man?
Unknown Speaker
Jason is saying it's a prior chrome plating company. Ah, that sounds like contamination. Yeah, he said could be contaminated. Yeah, it sounds like there's some possible contamination there.
Unknown Speaker
If that was the case, then $500,000 would be too expensive. Any time we're looking at industrial, especially, but any commercial property, of course, you want to make sure that you're going through and doing a phase one environmental report. You want to make sure that you know what you are getting yourself into, because environmental cleanup can be very scary. It can be dangerous. It can be expensive, but it can also be relatively innocuous. I mean, it could be as simple as like it's just lead paint. All right, cool. Let's just clean that off. All right.
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Garden Man is saying I am using your new system. I think he's talking about Siri Central Pro, the software suite. He said it's fantastic. Thank you for developing it. What is the cost for full access? Well, Garden Man, if you are if you're using it now, it's 100 bucks a month
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for access to all that.
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Software. At least that's the price today. Don't get mad at me if you listen to this episode two years from now, and it's a different price. That's what it's priced at today, as of October of 2026.
Unknown Speaker
And we're we're probably going to keep it there for a little while. Yeah, it's a it's a fun it's a fun tool, man. I mean, it's it's made it so easy for us to underwrite. I mean, you we just walked through it. We found a deal and underwrote it and stress tested it in 30 minutes. I mean, realistically, we are on average inside the mastermind. Well, I guess this is all users across Siri Central Pro.
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Our average time to underwrite a deal is now under 10 minutes, which is pretty crazy
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because the software is just so easy to use. Like once you learn how to use it, relatively straightforward.
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MSLDK saying what up, Tyler? What up, dude? How's it going? Thank you for joining us. All right, guys, appreciate y'all for joining me on today's episode of Office Hours, diving into some underwriting. Hopefully, y'all enjoyed looking at a value add flex deal and kind of seeing how I would approach that opportunity. If you guys want me to underwrite something else? If there's a certain property type or a certain city, state, whatever it is, drop it in the comments. Let me know. Don't forget to like and subscribe. Appreciate you guys for being here, and I'll see y'all next Tuesday, 830 a.m. Central Standard Time. Peace.
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This episode of the Commercial Real Estate Investor Podcast is brought to you by my CRE Accelerator Mastermind, where you'll get access to my step-by-step investment blueprint, essentially a library of resources on how to invest in commercial real estate. You'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way, go to
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www.crecentral.com to learn more.