Episode
384. Watch Me Underwrite a Real Industrial Deal in 30 Minutes
- Published
- Jun 1, 2026
- Duration seconds
- 2472
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- https://www.tylercauble.com/podcast/episode384
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Summary
Key Takeaways Location for Flex/Industrial Don’t go “main & main” in the city core (too expensive, competing with retail/office). Target major highways/arterials just outside town , where you can serve multiple submarkets at lower land/building cost. Pricing & Strategy Your all‑in cost/sf (purchase + rehab) must be well below new construction cost (~$120–$150/sf) or the deal won’t compete. Quick screen: if all‑in ≈ $100/sf and you can get ~$12/sf NNN , that’s about a 12% yield on cost → worth deeper underwriting. Kansas City Example Deal 4,260 sf building at $315K (~$74/sf) in Raytown; concept: split into two bays , add another roll‑up door, light rehab. Verified via Google Street View that there’s no real loading dock despite the listing. Underwriting Outputs (base case) Assumptions: 25% down, 7% interest, 20‑yr am, 2 tenants at $12/sf NNN, 3% bumps. Results: ~16–17% IRR , ~19–20% annualized cash‑on‑cash , ~2.0x equity multiple over 5 years, DSCR ~1.7x . Risk & Stress Test Even with rents at $10/sf and rehab at $100K , deal still modeled at mid‑teens IRR and solid cash‑on‑cash. But in a bear scenario (lower rents, higher vacancy, worse exit cap), you can lose money → need margin. Capital Raising Raising capital starts with your existing network : Call people, explain your deal type and target returns , and ask if they’d want to see one. Build a list of soft commitments before you have a live deal.