Know where the deal breaks before your earnest money goes hard.
Independent underwriting, model validation and quantitative risk analysis for multifamily sponsors, syndicators, general partners and acquisition teams.
Work directly with Dr. David Kremelberg, a Ph.D. statistician with more than 15 years of consulting experience. Challenge the assumptions behind the deal before committing substantial capital.
A projected return is only as reliable as the assumptions behind it. We help you understand what happens when those assumptions are wrong.
Illustrative sample — entirely hypothetical property data. View the illustrative underwriting report (PDF, 7 pages, 189 KB). This is an analytical demonstration, not a prior client engagement or a prediction of investment performance.
What Happens When the Market Doesn’t Follow the Business Plan?
The commercial real estate challenges following COVID-19 show why a favorable base case is only the beginning of due diligence. The Federal Reserve cut its target rate sharply in March 2020, to 0–0.25%. It then raised rates substantially during 2022–2023, reaching 5.25–5.50% in July 2023. Federal funds rates are not property loan rates, but the shift illustrates how financing conditions can change during an investment hold.
Many properties acquired in the low-rate period later faced higher financing costs, difficult refinancing, pressured valuations and operating cash flows, and disappointing investor returns. The effects varied by property type and market. Strong rent growth or a successful renovation did not necessarily offset a more expensive capital structure or a higher exit capitalization rate.
We examine a broad range of plausible outcomes, including severe downside scenarios and several adverse developments occurring together. The purpose is to identify vulnerabilities, compare alternatives and support better-informed acquisition decisions.
- Interest rates, refinancing terms, debt maturities, debt-service coverage and liquidity.
- Rental income, rent growth, occupancy, vacancy, concessions and bad debt.
- Operating expenses, insurance, property taxes, renovation budgets and construction delays.
- Exit capitalization rates, property-value scenarios and changes in the holding period.
- Sponsor fees, distribution waterfalls and investor returns after costs.
- Combinations of adverse assumptions that can erode returns or require additional capital.
Analysis cannot prevent losses, anticipate every outcome or guarantee investment performance.
Independent Underwriting and Model Validation
An independent review can expose formula errors, inconsistent sources and uses, unsupported assumptions and risks obscured by a single projected return. We trace important assumptions to the materials provided and distinguish documented inputs from estimates.
Depending on the agreed scope, we review normalized net operating income, financing, multiyear cash flow, debt metrics, valuation scenarios, break-even conditions, IRR, equity multiple, cash-on-cash returns and relevant LP/GP distribution waterfalls.
Stress Testing and Advanced Statistical Risk Analysis
Sensitivity analysis shows how results change when one or two assumptions move. Combined scenarios test what happens when rent growth slows while expenses, interest rates and exit cap rates rise together.
Advanced Risk Underwriting adds Monte Carlo simulation and other appropriate statistical methods. Rather than reporting one expected return, the analysis can show a distribution of possible outcomes, the modeled likelihood of missing return targets, potential capital impairment and the variables associated with the greatest downside.
Every probability estimate is conditional on the stated distributions, dependencies and data. We explain those assumptions and test alternatives; a simulation is not a prediction or a guarantee.
Three Packages with Transparent Pricing
All prices below are in USD for an agreed single-property scope. At launch, the standard scope is one existing multifamily property with up to 150 units, one senior debt structure and one conventional distribution waterfall, using organized electronic records. Other commercial assets, portfolios, ground-up development, complex capital stacks and material data reconstruction are reviewed and quoted separately.
Underwriting Audit
Standard $950 · 2-business-day rush $1,900 · 1-business-day extreme rush $2,850
Review your existing underwriting model and its supporting assumptions. Check calculations, normalized NOI, debt and exit assumptions, sensitivities and break-even conditions. Receive a concise written findings report identifying potential errors, questionable assumptions, material exposures and further diligence needs. Model reconstruction is outside the audit scope.
Independent Underwriting
Standard $1,950 · 2-business-day rush $3,900 · 1-business-day extreme rush $5,850
An independent assessment using the offering memorandum, T-12 financials, rent roll, debt terms and other agreed materials. Deliverables include multiyear cash-flow projections, NOI, debt metrics, IRR, equity multiple, cash-on-cash returns, DSCR, a relevant conventional distribution waterfall, scenario comparisons and written conclusions.
Advanced Risk Underwriting
Standard $3,500 · 2-business-day rush $7,000 · 1-business-day extreme rush $10,500
Includes the independent underwriting scope plus appropriate statistical risk modeling. Evaluate correlated assumptions, return distributions, adverse scenarios, target-return shortfalls, possible capital impairment and the assumptions driving downside exposure. Receive documented modeling assumptions and written risk conclusions.
Standard and Expedited Turnaround
Standard delivery is approximately 5–7 business days, depending on the agreed scope and availability. Two-business-day rush service is priced at 2× the underlying package fee; one-business-day extreme rush is 3×.
Delivery timing is confirmed in writing after scope acceptance, payment and receipt of complete required information. Rush service is subject to availability and complexity. A one-business-day advanced analysis requires a previously validated property model and an agreed risk-analysis scope; a new model build may not qualify.
Materially incomplete, disorganized or revised information can change the scope and schedule. No rush commitment is made until the materials and deadline have been reviewed.
100% Package Upgrade Credit
Start with the level of analysis the transaction warrants. If you upgrade for the same property and substantially the same transaction within 60 days, 100% of the underlying package fee already paid is credited toward the higher package.
Audit to Independent Underwriting: $1,000 additional. Audit to Advanced Risk Underwriting: $2,550 additional. Independent to Advanced Risk Underwriting: $1,550 additional. Sequential upgrades receive cumulative credit, so the underlying package fees total the price of the final package.
Material changes to transaction terms or underlying data may require separately approved charges. Rush premiums pay for expedited delivery and are not credited. Any rush charge for an upgrade is quoted for the remaining agreed work before it begins.
A Hypothetical Example of Assumption Risk
Consider an entirely fictional 80-unit property acquired for $15 million with 70% initial debt. In our illustrative model, the sponsor’s low-rate base case produces a 21.7% LP IRR. Changing the rent-growth, expense-growth, vacancy, refinancing and capitalization-rate assumptions reduces modeled LP IRR to 1.4% and requires approximately $488,000 of additional deal equity after the modeled reserve is used.
These are hypothetical calculations, not an actual DKSC engagement, a market forecast or a claim that these outcomes are likely. The sample report documents the cash flows, fees, financing constraints, waterfall and simulation assumptions so the difference can be examined.
Read the seven-page illustrative underwriting report (PDF) using hypothetical property data.
Why Work with DK Statistical Consulting?
For this service, DKSC is paid for analytical work, not a brokerage commission or transaction-closing fee. Potential conflicts are checked before an engagement is accepted.
Our work is property and financial-model decision support for business clients. It is not a licensed appraisal, brokerage service, capital-raising service or a personalized recommendation to purchase syndication securities. Scenario values are conditional calculations, not an opinion of current market value.
- Ph.D.-level statistical expertise applied to assumption validation, sensitivity analysis and probabilistic modeling.
- Direct work with Dr. David Kremelberg and the established DK Statistical Consulting business.
- An independent analytical perspective and a consulting fee agreed before the project begins.
- Clear separation of documented facts, modeling assumptions, unresolved questions and conditional conclusions.
What to Include in Your Quote Request
Use the existing contact form and include the following in your message. Initial information is sufficient to assess scope; do not send confidential deal records through the public inquiry form.
- Your business role, company and property type.
- Approximate property value and number of units.
- The underwriting questions you want answered and package of interest.
- Your due-diligence or hard-money deadline and whether rush service is needed.
- Whether an offering memorandum, T-12, rent roll, existing model, debt terms and renovation budget are available.
Document-transfer arrangements and any confidentiality requirements are agreed before sensitive records are provided.
Understand the Downside Before You Commit
Bring the assumptions, the available documents and the decision deadline. We will review the fit, recommend an appropriate scope and confirm the fee and realistic delivery schedule before work begins.
Historical References
Federal Reserve statement, March 15, 2020; Federal Reserve statement, July 26, 2023; FDIC 2025 Risk Review, Commercial Real Estate. These references support the historical discussion, not the hypothetical property assumptions.