Assessing Risk · multifamily

Assessing Risk

Hey all, hope everyone is having a good week! Looking through the posts here and based off my other posts, I wanted to touch on how AI could help with assessing risk. This could be done by analyzing the property underwriting, running different scenarios, and generating a risk summary. The process would be as follows:

Upload the property's underwriting to an LLM

2. Test a bunch of different scenarios like increasing interest rates, decrease in occupancy, rents not meeting projections, and increase in expenses (not an exhaustive list). These can be written in an Excel or Google sheet and uploaded alongside the underwriting

3. Prompt the LLM: "You are a helpful real estate deal analyzer. Analyze this property's underwriting and test all the scenarios in the spreadsheet provided. Use the information provided and do not make up additional scenarios. Identify which assumptions have the biggest impact on the deal. Create a risk summary document that I can use to evaluate overall risk of the deal."

Truthfully, this should be used as a tool to evaluate risk and definitely should not replace your professional judgement. I've included a visual below for your convenience. Hope everyone finds this useful!

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Assessing Risk