Why We Underwrite Low — and Operate High
We never inflate the target price.
We do two things at the same time:
Target price is based on the lower, conservative FMV
Premium value is based on what we can implement operationally
Example (Luxury Estate):
Conservative FMV (as-is): $10,000,000
Target offer (85%): $8,500,000
Recorded price (45%): $4,500,000
Lender position (24%): $2,400,000
Premium value is NOT what we pay.
Premium value is what the asset becomes after execution.
Premium is:
Operational upside
Monetization layers
Income expansion
Premium is not:
Speculation
Hope
Appraisal manipulation
We buy on what exists.
We lend on what exists.
We operate into the premium.
| Asset Type | Typical Premium Range |
|---|---|
| Luxury Estates | 30–60% |
| Corporate Stays (SFR) | 20–30% |
| Multifamily | 10–15% |
| RV Parks | 10–15% |
| Mobile Home Parks | 10–15% |
| Golf Resorts | 20–30% |
| Marinas | 20–30% |
| Hotels | 25–40% |
| Casinos | 30–50% |
These are real, implementable upgrades, not theory.
Example (Luxury Estate):
As-is NOI: $600,000
Post-hospitality NOI: $1,000,000
Premium justification:
$400,000 additional NOI = 40% value lift
Lender script:
“We are lending on current income. The hospitality layer increases coverage, not leverage.”
Example (Corporate Stay SFR):
Market rent: $6,500/month
Corporate lease: $10,000/month
Annual uplift:
$42,000
Lender script:
“Longer terms, lower turnover, stronger DSCR.”
Example (20-unit MF):
Average rent: $1,100
Repositioned rent: $1,300
Annual uplift:
$48,000
Lender script:
“Incremental rent increases across stabilized demand.”
Example (Estate Buyouts):
24 events per year
$25,000 per event
Annual income:
$600,000
Lender script:
“Non-cyclical event revenue layered on top of lodging.”
Example (RV Park):
Standard pad: $650/month
Premium pad: $950/month
Uplift per pad:
$300/month
Lender script:
“Utility-light improvements with immediate cash yield.”
Example (Golf Resort):
200 memberships
$5,000 initiation
Capital inflow:
$1,000,000
Lender script:
“Membership capital strengthens reserves and liquidity.”
Example (Marina):
Slips at $900/month
Repriced to $1,200/month
Annual uplift (50 slips):
$180,000
Lender script:
“Scarcity-driven demand with low operating expense.”
Example (Hotel):
ADR: $180
Premium suites ADR: $350
Blended ADR increase:
35%
Lender script:
“Revenue per key improves without increasing unit count.”
Example (Casino):
Gaming revenue: $4,000,000
Hospitality + events add: $1,500,000
Premium lift:
37.5%
Lender script:
“Diversified revenue stabilizes volatility.”
Example:
Unbranded NOI: $800,000
Branded NOI: $1,100,000
Value impact:
$300,000 annual NOI increase
Lender script:
“Brand recognition lowers vacancy and improves predictability.”
“We underwrite the loan on today’s income and today’s value.
The premium comes from execution, not leverage.
Our structure reduces risk while expanding upside.”
“The target price stays conservative.
The premium is earned through operations.”