What’s One Question You Always Ask Before Making an Offer?

Question

When evaluating a multifamily opportunity, there are dozens of things to analyze, but most experienced investors seem to have one question they always come back to before moving forward.

For those actively investing:

What’s the one question you always ask before making an offer?

Examples:• What am I missing?• How do I lose money on this deal?• Is there enough margin for error?• What's the realistic exit strategy?• Can the property support the debt?• Why is the seller selling?

Interested hearing what question has helped you avoid mistakes or make better investment decisions over the years.

Alecia Loveless · Answer

I wouldn't ask it of the Realtor but one of the first things I look at when evaluating deals is the property taxes. In my area you can have a $100,000 property  with $1800 in taxes and a similar deal with $4000 in taxes. Obviously $100,000 is just a figure given today's market but as the value increases so can the difference in taxes.

in many areas the taxes are going to change as soon as the transaction is recorded so I'd be super aware of that.

A $2400+/yr difference in taxes can be the difference between a decent deal and a terrible deal.

Greg Scott · Answer

Based on the title, I wasn't going to reply, but reading the full post, I will.

Most of these questions will make you seem like an inexperienced buyer and asking these questions will cause you to be disqualified by the broker.  Do not ask them.

The ONLY question you have listed here that is a viable question is "Why is the seller selling?"  All of the other questions, an experienced operator would be able to figure out from the underwriting process. If you can't, it screams "rookie".

I will give you one other good question, that I often ask of the Maintenance Supervisor.  "If you had a blank check to fix anything you wanted to fix on the property, what would that be and how much would you need?"