1) Submarkets We Actually Like

Translation: we prioritize blocks with proven footfall, transit, and end-user depth. Pretty streets with weak economics don’t make the cut.

2) What Kills Deals Fast

• AL (short-term rental) dependency. Policy is a moving target. We don’t underwrite AL as the core driver.
• Heritage facades that trigger costly approvals without a price discount.
• Hidden structure: rotten timbers, sagging slabs, seismic flags. If the survey smells off, we walk.
• Condo assemblies you can’t control. If you can’t pass the vote, you don’t have a plan.
• Loose capex scopes. “We’ll see on site” is how budgets get torched.

3) Permits & Rehab: Keep It Tight

• ARU/ORU angle: Target designated rehabilitation areas when possible. They can unlock friendlier rehab tax treatment — only if criteria are met. We confirm eligibility on paper before pricing the deal.
• Process reality: Fast tracks exist on paper; actual timelines vary by file quality and building quirks. We assume slippage and build contingency.
• Scope control: Freeze drawings before tender, require line-item bids, hold retentions, and tie payments to inspections.

4) Taxes & Transaction Costs (Headlines Only)

• Acquisition: Transfer taxes and stamp duty hit cash day one — we price them in at underwriting.
• Holding: Annual municipal property tax (IMI). Rate varies by municipality/asset.
• Rehab VAT: Certain projects in designated areas can qualify for reduced VAT on works when conditions are satisfied. We confirm before closing.

We run this with local counsel and tax advisors per asset so there are no “surprise” cheques.

5) Leasing & Tenant Mix

• Street retail: Daily-needs (grocery, clinics, pharmacies), bankable F&B, and services with multi-unit operators. We avoid concepts that only work in July–August.
• Multifamily: 1BR/2BR mixes with rational sizes; balconies or outdoor space add real pricing power.
• Office (only with edge): Pre-lease or niche product; generic refurb office is a coin toss.

6) FX & Debt

• Share classes: USD-hedged for payout stability; unhedged for investors who want euro exposure.
• Leverage: Match tenor to works and lease-up; don’t let covenants force bad exits. We would rather miss a deal than wear the wrong debt.

7) Underwriting Cheatsheet

• Title & condo docs reviewed before LOI hardens. No exceptions.
• Permit path mapped (what, who, how long). Build delay scenarios into IRR.
• Capex: full survey, invasive where needed; include services (MEP), structure, envelope, accessibility, fire.
• Exit math works at conservative rents and realistic exit cap. Kill the deal if it only works on hero numbers.
• Tax & fees: acquisition taxes, annual IMI, rehab VAT treatment, professional costs — all modeled in cash flow.
• FX: hedge cost in the USD class; explain it in plain English to LPs.

8) What Success Looks Like

A clean buy at the right basis, a fixed-price rehab that stays inside the rails, leases signed with tenants who can actually pay, and distributions in USD that match what we told investors. No drama. Just discipline.