Analyzing multi family unit commercial apartment deals
What is the first and foremost thing I’d want to study when analyzing whether I have a good deal or not on a commercial apartment building of 5+ units?
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NOI and market cap rate are the two most important things in determining the value of a building.
The key is verifying all of the numbers (income/expenses) to make sure that the NOI is properly accounted for.
In my market it's common for brokers/sellers to leave expenses like property management amongst others out.
It's also common for them to present a deal based on pro-forma numbers instead of the actuals.
This makes the NOI appear higher which ultimately makes the building look like it's worth more on paper.