"The Fourplex Surprise"
I remember an investor showing me a fourplex he had just put under contract. He was excited, and the first thing he told me was the purchase price. You could tell he'd worked hard to negotiate it down, and honestly, he'd done a good job.
We talked for a few minutes before I interrupted him: "How long have the tenants been there?"
He didn't know.
"What are the current rents?"
He had to check his notes.
"Can they be increased?"
"I think so."
That was the moment the conversation changed.
We never really went back to the purchase price. Instead, we spent the next half hour talking about rents, vacancies, deferred maintenance, and what the property could realistically become over the next couple of years.
I left that meeting thinking about something: the price got his attention. The business behind the property got mine.
That's probably one of the biggest differences I see between newer and more experienced investors. One is excited about buying a property. The other is actively thinking about running it.
(Have you ever had a deal where the thing that looked most important at first ended up being the least interesting part?)
- Drago Stanimirovic