Words hide red flags in a real estate deal. But numbers are the source of truth.

So, what numbers should you be looking at when you evaluate a multifamily deal?

Jason Baik is Managing Principal at Compounding Capital Group and Founder of The Underwriting Lab, a platform that helps aspiring multifamily investors learn a data-driven approach to apartment investing.

An ex-VP of Data Science, Jason left his six-figure corporate career to become a full-time investor before he owned a single property! Two years later, he has built a portfolio of 350 apartment units and seven single family homes.

On this episode of Financial Freedom with Real Estate Investing, Jason joins me to explain how the data pointed him to real estate as the best vehicle for generational wealth and why he transitioned to multifamily investing early on.

Jason discusses how he connected with his business partner at Compounding Capital, describing what makes their partnership work and how they’re adjusting their underwriting right now.

Listen in for insight on how Jason used the Syndicated Deal Analyzer to launch his multifamily career and learn how understanding the numbers helps you analyze risk and make the right decisions for your investing journey!

Key Takeaways

What inspired Jason’s interest in real estate investing

  • Tired of being told what to do in corporate career
  • Data shows best vehicle for generation wealth

Why Jason transitioned to multifamily right away

  • Bought SFHs with intention to scale to multifamily
  • Managing units at scale just as easy as one

How Jason worked through the fear of bigger numbers

  • Bought in peak of COVID, faced many obstacles
  • Assumed things would get easier after first year

How Jason and his business partner split their roles

  • Jason does systems, underwriting and financials
  • Partner manages contractors, meets with brokers

How Jason and his partner fund their multifamily deals

  • Lead sponsor on syndication for latest deal
  • Also co-sponsor deals with other groups

How Jason met his partner at Compounding Capital

  • Online networking, kept in touch on Zoom calls
  • Flew to Cincinnati to get to know better

Jason’s biggest hurdles in shifting to multifamily investing

  • Cutting down on renovation costs, utilities, etc.
  • Must treat as business rather than hobby

Why Jason quit his job without owning a single property

  • Really good at focusing on single thing
  • Had runway in savings and wife’s support

The importance of numbers in real estate investing

  • Serve as objective source of truth
  • Help you feel comfortable with level of risk

How the SDA helped Jason get started in multifamily

  • Found by word-of-mouth with network
  • Speak same language, build trust with investors

How Jason is adjusting his underwriting right now

  • Don’t factor in refinancing anymore
  • Project rent growth on low end
  • Stick to numbers when make offers

Related Articles

Understanding the Pay Yourself First Method

What is Pro Forma?

What is Capital Preservation?

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