Stuck in Deal Analysis - Help!!!

Stuck in Deal Analysis - Help!!!

Member since 2024 · 3 posts · 1 vote

I'm a U.S. citizen living in Mexico and I've been trying to find the right deal in the U.S. - looking primarily for 1-4 unit residential on the small side, or as big as a 5-16 unit commercial multifamily - for about the last year. Have funds saved to get into something as large as a $2.5M building, but stuck trying to find my footing with the deal analysis process.

Been working with one broker since March of this year who I really trust, but he hasn't been able to find any deals in his area. I feel like I'd like to start looking at more deals in different markets, as I'd like to make a purchase before the end of the year, but I need to feel confident about the following: 

(a) understand what returns I should be shooting for

(b) have a fast 10-min evaluation system to make initial, high-level assessments of the deals

(c) have a more in-depth evaluation method if it passes the sniff test. 

My goal is to have some standardized templates that help accomplish the above goals, but after reading lots of books, listening to podcasts, and trying to make some tools myself, I'm still struggling to have a good system and feel like I'm just spinning my wheels. 

Anyone have this similar problem getting started? How did you overcome it? Any suggestions would be greatly appreciated. (Keep in mind that Math was NOT my favorite subject at school.) Thanks, everyone!

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  • Ricardo R.Pro Member
    Property Manager · Michigan Ctr, MI · Member since 2016 · 661 posts · 581 votes
    1y

    Hey Justin,

    Totally hear you — deal analysis can feel overwhelming, especially when you’re staring at spreadsheets and trying to figure out “what’s good” vs. “what’s not.” A couple thoughts:

    1. Returns to shoot for:

    • Small multis (1–4 units): Most folks want at least some positive cash flow after all expenses, plus a CoC return in the 8–12% range.

    • Larger multis (5+ units): Think more like 12–15% IRR and 6–8% cash-on-cash during hold, with upside on exit. Every market is different, but those are decent benchmarks to keep you from chasing thin deals.

    2. Quick 10-min sniff test:
    I use a simple “back of the napkin” rule:

    • Take gross rents × 50% (that's your rough NOI after expenses).

    • Subtract debt service.

    • If you’ve got positive cash flow left, it’s worth a deeper look.
      This weeds out 90% of deals in under 10 minutes.

    3. Deeper analysis:
    Once a deal passes the sniff test, plug into a more detailed calculator. BiggerPockets has a rental property calculator that's solid, or you can build a simple Excel with inputs for rent, vacancy, taxes, insurance, repairs, CapEx, etc. Don't overcomplicate — the goal is consistency, not perfection.

    4. Don’t get stuck in “spreadsheet paralysis.”
    At some point, the best way to learn is to underwrite a ton of deals, even if most are junk. The reps build speed and intuition. I tell new investors: analyze 100 deals and you’ll start to see patterns.

    My advice: Since you’re abroad, you may also want to consider working with brokers/PMs in multiple markets, not just one guy. Trusted relationships matter, but limiting yourself to one market could be why you feel stuck. You’ve already got capital and motivation — just tighten your system and volume. Don’t wait for the “perfect” deal template to appear. I really hope this helps you a bit, I sent you DM on BP and hope you can assist. 

  • Scott AllenBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
    1y

    @Justin Biel just curious, what market are you looking in? Happy to connect and show you how I break deals down when I am buying them

    Reafco - Columbus, OH
  • Member since 2024 · 3 posts · 1 vote
    1y

    @Ricardo R. Thanks for quick response. That's very helpful, especially the sniff test method to cut out the majority of the deals. I'm not particularly Excel savvy, so might be easier to get the Bigger Pockets calculator and go from there. Will check the DM. Thanks. 

  • Member since 2024 · 3 posts · 1 vote
    1y

    @Scott Allen Been looking at two markets where I have family in the states - CO and MT - and the broker I've been working with focuses on WI. I'll send you a text and we can connect. Thx!

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