3 Stress Tests for a Real Estate Development Model
If you're thinking about getting into real estate development, you'll need to know the proper metrics by which to gauge the industry. One of these is stress tests, and it's an area in which any up-and-coming or long-standing member of the real estate development community will want will want a firm degree of competence.
In this video, Scott Choppin, CEO and Founder of Urban Pacific, lays out how his company deploys stress tests, specifically in the multifamily and workforce housing models.
From this video:
Scott: Basically we'll run a set of numbers. Right. When we run the numbers we check rent comps. You know, we’ll check. Operating expense comps. For us, because we're building new construction, we have to basically assess costs, right, to build hard cost and then a lot of times will we'll set well, we'll research city impact fees. You know, think school fees, building permit fees, zoning fees and those kinds of things so that we don't do zoning. But, you know, you know, all fees are, you know, charged by cities although they’re all named differently from city to city.
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