Watch Grant Cardone explain what it means to underwrite a real estate deal. Find out why it’s important, who should do it and the calculations involved so you end up with the best deal that will make you the most money.
An underwriter determines how much risk the lender is willing to accept. In most real estate loans, the property itself is used as collateral against the borrowed funds.
Grant uses several underwriters on a deal so he can determine the WCS (worst case scenario) to make sure the deal will be profitable.
He looks at the GSI (gross schedule income), studies the EGI (effective gross income), deducts operating expenses to reveal the NOI (net operating income) and uses this data to calculate a capitalization rate so he can determine if the deal is worth pursuing.
Underwriting is another tool to learn when it comes to investing in real estate.
Think big. Go big. Play big and know what you’re doing.
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Grant Cardone is a New York Times bestselling author, the #1 sales trainer in the world, and an internationally renowned speaker on leadership, real estate investing, entrepreneurship, social media, and finance. His 5 privately held companies have annual revenues exceeding $100 million. Forbes named Mr. Cardone #1 of the "25 Marketing Influencers to Watch in 2017". Grant’s straight-shooting viewpoints on the economy, the middle class, and business have made him a valuable resource for media seeking commentary and insights on real topics that matter. He regularly appears on Fox News, Fox Business, CNBC, and MSNBC, and writes for Forbes, Success Magazine, Business Insider, Entrepreneur.com, and the Huffington Post. He urges his followers and clients to make success their duty, responsibility, and obligation. He currently resides in South Florida with his wife and two daughters.
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