Underwrite Like a Pro: Real Estate Deal Analysis With Dr. Jason Williams

Jason Williams (00:00)
People are still coming to me thinking deals are better than they are until they talk to me and I tear their underwriting apart. But the people that come to me are like they’re usually like from another like mentorship program. I’m not gonna mention any names, but they come to me for like a second set of eyes and I’ll go through it and I’ll say

This number should be this, or do you realize you’re quadruple dipping on your rent income or triple dipping on your rent income? And you’re starting at day one of closing. And so people don’t know really how to either model it or that they’re even modeling it that way.

Scott Bursey (02:16)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host, Scott Bursey. And today we’re thrilled to have Dr. Jason Williams from Lorren Capital and Ironclad Underwriting Mastery joining us. With over two decades of dedicated experience in the real estate sector, Jason has underwritten more than 500 million in deals and successfully.

analyzed over 100 complex transactions. Today you can expect to walk away with a master class in underwriting discipline and the strategic foresight needed to scale in this market. Jason, welcome to the show.

Jason Williams (02:57)
Thank you, Scott. Happy to be here.

Scott Bursey (03:00)
It is just it is awesome having you here, doctor. And to help our listeners get up to speed. Please give us the ninety second highlight reel of how your career ignited and where you’re pouring your fuel now.

Jason Williams (03:14)
So I’ve always sort of been involved in real estate my whole life. My parents have been in it and so I knew I was always gonna do it. but I still went to college. I went and got an engineering degree. I got two of them actually. I got a Ph.D. in chemical engineering. I bought my first house while I was in grad school. I still have it to this day. I’ve cash-out refi’d it numerous times for other investments.

but as I was a engineer, I worked at R&D or worked in the R&D capacity research and development, where we would test units. there’s specifically plate heat exchangers, test units, gather data, and I had to somehow convert that data to allow the salesman to sell them. And I ended up creating systems so that the lab tech who gathered the data could input the data and push a button and it

go through and analyze everything and spit out what the salesman can do so that I could be involved in other things versus number crunching. So I took that philosophy and turned and used it for real estate investing. So now I have systems set up so you can upload a rent roll, a T12, and an OM, push a button, and like 90% of your underwriting is already done for you. So you don’t have

do all the manual inputs. You don’t have to try to do any coding in Excel or anything. All of that is done for you. So that’s what I do with Ironclad. I do have like a coaching program with that. I do a a program where I can do it for you or do it with you. So I can do all of that capacity. I have clients for I have students. I have clients for consulting and I have people

actively using my my web app right now. So

So that’s how, but I didn’t even get into what we, what we invest in. We have a few large multifamily, we have single family, residential multifamily with like triplexes and quads and duplexes. And I’m also working on a mobile home community development. Right now it’s just ag land that’s soon to be a mobile home community. So I’m working on that as well.

Scott Bursey (05:15)
Sort of a

Wow. Talk about a trajectory. That is phenomenal, Doctor. You know what really caught my attention about you was the way you’ve been able to navigate over 20 years in the industry while maintaining such a high standard, underwriting half a billion dollars in deals and tackling those 100 plus complex transactions that would scare off most people. Curious to know, when you look at your own business, what

Do you consider to be your absolute strongest asset right now?

Jason Williams (07:05)
So my my personal one is I I create the systems, minimal user input. the less user input, the less a human can mess up. it do there everything does require human interaction, but I minimize what’s required. so like I said, I did that as an engineer and I carried that same skill set into real estate investing.

as an engineer, also I’ve been told I’m like very detail oriented. To me, it’s just normal day to day operation, but I guess I get into the weeds more than most people and my lenders like it. my brokers love it. So it’s like whenever I hand them an underwriting for a property we’re on, like they they love it right away. So another strength that I have or actually the whole team.

is we believe in Who Not How. So if we have a skill set that we’re lacking in, we are not hesitant to partner with someone who has that skill set or hire it out or whatever. If we if we have to do something that we don’t like doing, we find a way I find a way to automate it or hire again someone to do it for me so that I don’t have to do that. So I try to streamline everything so that

our whole team can work in our superpower.

Scott Bursey (08:37)
So

Following up on those strengths, how are you actively protecting that competitive edge against market shifts?

Jason Williams (08:51)
Well market shifts are gonna happen regardless. And so

Really? And I always tell people and and and I too have a podcast and we talk about it’s not timing real estate, it’s about time in real estate. so like the best time to plant a tree was twenty years ago, and the second best time is is now. So I say get into it. There are deals to be had. there’s deals that not to be had, but

My wife Angel’s grandparents got into real estate in the late seventies, early eighties when interest rates were like close to twenty percent and they were able to succeed in that. So because we’re having rising interest rates now that going up to maybe six, seven percent, eight percent, that’s no reason not to invest. So you just need to account for that accordingly.

Scott Bursey (09:54)
Interested to hear, doctor. Every operator has blind spots. Where do you see the biggest weakness or vulnerability in your current operations?

Jason Williams (10:38)
Well, for one thing, we don’t know what we don’t know. So we all believe in like constant education, constant experience, learn from your experience. And and and I’ve learned quite a bit like going into this mobile home community development that I might not have gotten into it otherwise, but I don’t think it’s a bad thing.

But it’s like I didn’t know we needed to do this back when we were doing our due diligence and there was nobody there to guide me on what to do because my whole network is for like multifamily or already mobile home communities that are already developed, not not ground-up development on that. So there’s quite a learning curve on that and

So yeah, we just constant learning, not not not holding back because we don’t know something, but continually moving forward and learning along the way, I think.

Scott Bursey (11:54)
That makes perfect sense. Thanks for the insight. And thinking about the current landscape, what is the biggest opportunity you see that most investors are completely missing?

Jason Williams (12:04)
People are still coming to me thinking deals are better than they are until they talk to me and I and I tear their underwriting apart. But the people that come to me are like they’re they’re usually like from another like mentorship program. I’m not gonna mention any names, but they come to me for like a second set of eyes and I’ll go through it and I’ll say this is

This number should be this, or do you realize you’re quadruple dipping on on your rent income or triple dipping on your rent income? And you’re starting at day one of closing. And so people don’t know really how to either model it or that they’re even modeling it that way.

So that’s one big thing that I I see from my clients who come to me.

Actually I have a whole laundry list of things that I typically see that I don’t know if we have time to get into, but yeah, so I mean there’s all opportunities everywhere. my business partner says you’re looking for a needle in a haystack. Those needles are there. You just have to go through a lot of straws of hay to find so and we do go through a lot of straws of hay to find them.

Scott Bursey (13:30)
And I’d love to get your take on this. What is the biggest threat facing the market right now that you’re keeping a close eye on?

Jason Williams (13:38)
Biggest threat.

I don’t know if it’s considered a threat, but I am I mean I’m everybody’s watching interest rates. Nobody really knows what’s going on. Are they gonna go up? They’re gonna are they gonna go down? if we’re we’re facing inflation in our country right now, and really the only way to curb the inflation is for rates to go up, but nobody wants the rates to go up, so that means inflation’s gonna go up. And so that’s

killing deals, that’s changing people’s expense ratios because expenses are going up but the income can’t handle it and so your expense ratio is is soaring. So there’s a lot of things that we’re looking at. But if you can model things properly, you understand you get the best information you can. It doesn’t really matter what it is, so long as you know what your business plan is and it’s accurate. And you’re not just guessing

on things and hopin’ for the best, sir.

Scott Bursey (14:46)
Doctor, it’s worth asking as you look at your long term goals, how are you positioning your business to align with where the market is heading three to five years from now?

Jason Williams (15:38)
So coming from residential space, my wife and I are big believers in the buy and hold. So we’re not looking at the three to five year space on most of our investments. We’re looking at the generational legacy wealth that we’re creating for our kids. now with our syndications, you can’t really do that because the investors don’t want

to hold their investment that long. They want their capital back. And so with that, we are we’re boosting our NOIs, we’re watching the markets, and we’re determining the best time to exit those. and when that happens, my wife and I are looking to either figure out a way where we can reposition ourselves to to buy the assets back for ourselves, or we’ll just take the

the proceeds and deploy into something else. So and and and another thing with the buy and hold philosophy is we don’t have to do as many ten thirty ones because we’re holding it until our kids can take over.

I don’t know if your listeners knew what the 1031 is. I I would I’m assuming they do. The 1031 exchange where you can defer your taxes indefinitely until death, so

Scott Bursey (17:02)
And what is the one thing you’re doing today to ensure that you’re ready for the future and what the your business is going to accomplish as far as lowering capital is concerned, Jason.

Jason Williams (17:19)
Really we’re maintaining our current properties. Once we get the mobile home community breaking ground, we will again start investing more. Right now that’s taking up a lot of our capital and time. And so we’re limited in that capacity. But once we get going on that, I think we’ll be in a really good position to to move forward.

Regarding my underwriting, I’m constantly developing my web app Ironclad. It’s currently in open beta. So if you want access to it, you can go to my website, ironcladunderwriting.com forward slash beta tester. And it’s free right now. So if you sign up, you can start using it. Underwrite live deals. I’ve shared deals with my lender and

They didn’t need an Excel sheet, they didn’t need anything. They took it straight from mine and were able to get me lending quotes like a day later. So it’s very user friendly. And I have YouTube tutorials on how to do that. But so that’s a lot of my time right now is developing and pushing that.

Scott Bursey (18:35)
And looking at the landscape, what does your professional network look like right now?

Jason Williams (18:41)
My professional network. Well pretty much my my whole my entire network is my professional network. I work from the house so I don’t have to really engage with people I don’t want to. So yeah, I’d like my wife goes to meetup, she’s the extrovert. I we hold masterminds, we go to masterminds coaching,

My wife holds meetups twice a week and she runs a summit twice a year. So we’re constantly doing things, we’re constantly getting education in that regard. Plus we’re always have a community going with hers things. So that that’s really what our network looks like.

Scott Bursey (19:33)
And Doctor, if you could help us break this down, if you had to give one piece of advice on underwriting a deal that separates the amateurs from the pros, what is the one money metric you watch most closely?

Jason Williams (19:52)
So really it’s not one money metric that I would do or look closely at. It’s really getting someone else to look at your deal. Someone even my own deals, I send it to my partner and say, Hey, what do you think of this? And they’ll always catch something that I might have missed. Because when you’re in the weeds, that’s all you see are the weeds. You don’t get the

get up to the thirty thousand foot view and say, All right, well your weeds are going the wrong direction. You need to step back and and reposition. And so I have someone else look at my deals and I would recommend everybody have someone look at their their deals apart from the original underwriter.

Scott Bursey (20:42)
I always get a second set of eyes, it sounds like.

Jason Williams (20:47)
Yes. Always a second set of eyes. And and I’m not saying that just because I have a consulting service that I can do that for you. I I mean find somebody in your network to do that with you. and then you do it for them so that I mean there’s mutual I I guess cooperation going on between your deals and your your friends deals and and just make sure, hey

Everything looks copacetic. Hey, your your rent increases look decent. Your rent your expense ratio looks good. Make sure you’re not overestimating your NOI jumping hundred and ten percent in year one. You need to make sure, hey, what’s going on and and why do these numbers look off and then be prepared to dig into them.

But there’s I’ve never have just like one number that affects everything. Sometimes it’s insurance, sometimes it’s taxes, payroll. Maybe rent increases and and rent growth is one of the big ones. But again, yeah, second set of eyes.

Scott Bursey (21:59)
Doctor, thank you so much for that. And you really have brought a lot to the conversation today. But is there any additional words of wisdom, a golden nugget or two that you’d like to leave with our listeners?

Jason Williams (22:14)
Yeah. One, I again I can’t emphasize enough the Who Not How principle. But two, as I was an engineer in a production facility, everybody had an opinion on real estate and that I was doing it wrong and I should sell all my properties and whatever, go buy a new truck or whatever. And I didn’t listen to any of and I’m glad I didn’t.

And so my biggest takeaway on that is don’t take advice from anyone who’s not where you are or what you’d wanna be.

Does make sense? Where what they take advice from someone who’s doing what you want to do or or at least going in the same direction as you, so

Scott Bursey (23:08)
That makes perfect sense, Jason. And that is some golden advice. For those of our listeners that would like to keep this conversation moving, stay in your lane or collaborate with you, what is the best way for them to reach you?

Jason Williams (23:22)
So I am active on LinkedIn. I think my name is Jason L. Williams, Ph.D. on LinkedIn. I have my website, ironcladunderwriting.com. I have all my links there. I have a Vault, I have lots of tool tips, a toolbox full of free resources for you. You can sign up to be a beta tester there.

And depending on when this airs, I have an intensive coming out in the end of Apr or August. But if you miss it and this one airs later than that, I will have other three-evening intensive where we go through I show you how to use my software, we deep dive into a deal and you know how to to underwrite after that. So all that again is on my website, ironcladunderwriting.com.

Scott Bursey (24:23)
Jason, thank you for joining us today on the Real Estate Pros podcast.

Jason Williams (24:28)
Thank you for having me, I enjoyed it.

Scott Bursey (24:31)
It’s been an absolute pleasure. And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be filling your tanks with the lineup of elite guests, just like Dr. Jason Williams, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.