What Makes You Take a Second Look at an Off-Market Deal?

[Rhema Odika]

I’ve been spending time analyzing off-market properties and talking with different investors.

One thing I’ve noticed is that every investor seems to focus on something different. Some care most about cash flow, others focus on appreciation, while some won’t even look at a deal unless it hits a certain cap rate.

For those actively buying rental properties, what are the first 2–3 numbers or factors you look at before deciding whether a deal is worth deeper analysis?

Curious to hear how different investors approach it.

[Arman Ahmed]

Quote from @Rhema Odika:

I’ve been spending time analyzing off-market properties and talking with different investors.

One thing I’ve noticed is that every investor seems to focus on something different. Some care most about cash flow, others focus on appreciation, while some won’t even look at a deal unless it hits a certain cap rate.

For those actively buying rental properties, what are the first 2–3 numbers or factors you look at before deciding whether a deal is worth deeper analysis?

Curious to hear how different investors approach it.

For me, the first thing I look at is whether there's enough margin between the purchase price and actual market value. After that, I want to know the realistic rent potential and the condition of the major systems. If those three pieces look promising, I'll dig deeper. I've passed on plenty of "good deals" because the rehab risk was too high or the cash flow disappeared once I used conservative numbers. A second look usually happens when I see a property that's clearly under market value in an area with strong rental demand and enough room for mistakes if the project doesn't go perfectly.