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When it comes to underwriting, stick to your guns and don’t compromise or you may regret it. Even when you make conservative assumptions, expenses tend to rise and occupancy and rents typically contract when the economy goes South. Despite your best attempts at conservative underwriting, there are always surprises. Tim Bates, Partner at Worth Commercial Real Estate in Ft Worth, has returned an investor level 38% IRR to his investors since 2105 by being incredibly disciplined with his underwriting and very patient with his acquisitions of mostly C Class apartment communities.
