Ken Doble joins Multifamily X Podcasts, recorded in Atlanta, to assess today's market and explain why so few deals pencil for private investors. He describes negative leverage and an extend-and-pretend market that keeps distressed assets off the table, while larger buyers like Cortland and Equity Residential keep transacting on a lower cost of capital. He lays out his STACKS framework for valuing real estate (Site, Timing, Assets all-in, Capital stack, Knowhow, Strategy) and argues real value-add still exists in mismanaged assets, citing a 576-bed Johnson City student housing deal where he expects to push rents about $117. He covers insurance costs rising 80% to 100%, fraud and dual books in fire reconstruction, land banking, and a Washington DC deal that fell from $75 million to $50 million. He stresses honest underwriting, real reserves, and patience, recalls losing everything at Miles Properties in 2008, and predicts AI will make manual underwriting obsolete within about a year.
Media · Multifamily X Podcasts
Value Add or Mirage? Inside Today's Multifamily Deals
What they cover
- Why so few deals pencil: negative leverage and extend-and-pretend
- Underwriting to cash-on-cash, not IRR, and hunting distressed deals
- The STACKS framework for valuing a deal
- Whether value-add is real: the 576-bed Johnson City turnaround
- Why a rival paid $10M over his number on a $69M deal
- Insurance up 80-100%, exclusions, and pooling risk across a portfolio
- Fraud and dual sets of books in fire reconstruction
- Using Gemini Deep Research for due diligence, and its limits
- Judging prop tech by cap-rate math: cut cost or headcount, not time
- AI making manual underwriting obsolete within roughly a year
In Ken's words
Right now, for private investors and syndicators, it's very difficult to underwrite deals that work. We're negative leverage, and most of the deals I look at do not work.
Sometimes the best deal you do is the one you don't do.
I'm not interested in saving time. I'm interested in saving money. Show me the software will reduce my payroll headcount, and then I can actually calculate the return.
Did you ever see a training video for Uber? It doesn't exist, because they created an experience so frictionless it's dumb-proof.
For those of you who have not been through a major recession, I'm not talking about 2022. I'm talking about a real estate recession where unemployment goes to 8, 9, 10%.
Don't judge a man by his answers, judge him by his questions.