So you’re looking for a new multi-family real estate deal, but how do you know if it’s a good one? 🤔 Well, let me break it down for you!
- First things first, always verify the actual performance through T12.
- What the heck is T12, you ask? It’s the trailing 12-month financials for a property, and this will give you a clear idea of the property’s income and expenses over the past year, so you can see if it’s a money-maker or a money-hole.
- Look at things like occupancy rates, rental income, and expenses. You want to see consistent, stable performance over the past year. If things have been all over the place, it might be a red flag.
- Next, audit those expenses! Don’t just take the seller’s word for it.
- You better believe I’m going to audit those bad boys. Are they in line with industry standards? Are there any surprise expenses lurking in the shadows?
- Dig into the numbers and make sure everything adds up. You don’t want to be caught off guard by expenses popping up after you’ve already signed on the dotted line.
- And finally, be sure to foresee inflation.
- Make sure you’re factoring in potential inflation when evaluating a deal. Will the rental income keep up with rising costs? Will your expenses skyrocket as prices inflate?
- Real estate is a long-term investment, so you want to make sure your property’s income can keep up with the rising costs of living.
So there you have it! When it comes to multifamily investment deals, it’s all about doing your homework and being prepared for whatever comes your way. But if you can navigate the twists and turns of this wild ride, the payoff can be oh-so-worth it.
Happy investing! 🏘💰
