How to Analyze Affordable Housing Multifamily Investments with Jarod & Dayne Conley

Introduction: Why This Episode Matters

If you’re serious about investing in affordable housing, you know the numbers have to work before the mission can succeed. In this episode of the Affordable Housing & Real Estate Investing Podcast, Kent Fai He sits down with brothers Jarod and Dayne Conley to unpack their hands-on approach to underwriting multifamily affordable housing deals.

Instead of surface-level “unit counts,” the Conleys share how they actually evaluate a property: from market cycles and debt strategies to conservative underwriting and investor alignment. For anyone who wants to invest responsibly in affordable housing while protecting both capital and community, this conversation is a goldmine.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.

What market cycles should affordable housing investors pay attention to?

Real estate is cyclical, and the Conleys stress the importance of knowing where you are in the cycle before locking in a deal.

• Upward phase: properties sell quickly, multiple offers, rising values.
  

• Plateau: days on market increase, values stabilize, buyers get more selective.
  

• Decline: cap rates rise, property values fall, debt terms can get risky.
  
  

They align debt strategy with market cycle. For example, in a hot market, they might take shorter-term debt if planning a quick reposition. In a softening cycle, they lock in longer-term fixed debt to ride out volatility.

How do you underwrite multifamily affordable housing deals conservatively?

Jarod and Dayne emphasize conservative underwriting as the cornerstone of their success.

Key practices:

• Plan for taxes: property tax increases often kill deals if ignored.
  

• Don’t force the numbers: never make assumptions just to make a deal “pencil.”
  

• Double-check every variable: expense ratios that look “too good” often mean something is missing.
  

• Use multiple eyes: they each underwrite deals independently, then compare results for accuracy.
  
  

As they put it, “Be surprised on the upside. Protect investors by being conservative upfront.”

What role do property managers play in affordable housing underwriting?

Unlike many investors who only loop in property management post-acquisition, the Conleys integrate their managers early:

• Walk every unit pre-closing to identify CapEx needs.
  

• Validate repair and maintenance budgets with real-world data.
  

• Leverage management input on neighborhoods, tenant base, and Section 8 operations.
  
  

This collaboration helps them avoid underestimating expenses and ensures a smoother stabilization period.

How do you choose the right investors and partners for affordable housing deals?

Not all capital is good capital. The Conleys are deliberate in aligning with partners who share their philosophy.

When unexpected capital calls arose on a 36-unit deal, their investor understood because he had experience in affordable housing. That alignment turned a potentially sour conversation into a manageable one.

Their lesson: “Pick investors who share your mission, not just their money.”

What value-add strategies work in affordable housing multifamily?

Unlike luxury developments, affordable housing requires a different approach to value-add. The Conleys focus on:

• Fair rent adjustments: aligning rents with HUD’s Section 8 formula.
  

• Utility bill-backs: where possible, charge back water or utilities.
  

• Expense efficiencies: reduce repair/maintenance through tenant insurance and better vendor agreements.
  

• Operational improvements: many of their best deals were won by running properties more efficiently, not by heavy renovation.
  
  

Key Insights from Jarod & Dayne Conley

• Always underwrite conservatively. Overestimating rents or underestimating taxes is the fastest way to lose investor trust.
  

• Match debt to the market cycle. Structure financing based on where the market is headed, not just where it is today.
  

• Leverage property managers. They’re your boots on the ground and your best reality check.
  

• Pick investors wisely. Philosophical alignment is as important as financial alignment.
  

• Efficiency creates value. Running properties smarter often delivers stronger returns than flashy renovations.
  
  

Best Quotes from the Episode

• “You can’t live in fantasy land. Conservative underwriting protects both us and our investors.” – Jarod Conley
  
  

• “We only run with good dudes. Investor alignment matters more than the check size.” – Dayne Conley
  
  

• “Sometimes the best value-add is simply running the property better.” – Jarod Conley
  
  

• “If your expense ratios look too good, something’s wrong. Double-check everything.” – Jarod Conley
  
  

• “When you’re nauseous before a deal, that’s growth. Lean into it.” – Dayne Conley
  
  

Common Questions About Affordable Housing Underwriting

How do you account for rising interest rates in affordable housing deals?
By stress-testing loans with higher basis points and locking in longer-term debt when the market looks risky.

What’s different about underwriting Section 8 vs market-rate deals?
Section 8 requires understanding HUD’s payment standards, inspections, and longer move-in timelines, but tenants tend to stay longer.

Should I use rules of thumb for expenses?
They can be a starting point, but rely more on property manager input and real numbers from the market.

What’s the biggest underwriting mistake new investors make?
Overestimating rent growth and ignoring property tax reassessments.

How important is choosing the right investor partner?
Critical. A misaligned partner can derail a deal faster than a bad contractor.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.

DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.