Key Takeaways
- Always verify that expense ratios are realistic — 35% is almost never accurate for multifamily properties.
- A low price does not equal a bargain — understand why the price is low before assuming upside.
- Anchoring to historical values in a deteriorating market leads to overpaying.
- Build and consistently use a pre-flight checklist to enforce analytical discipline.
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Test Your Knowledge
1.In the "Can't Miss Deal" scenario, what was the red flag about the 35% expense ratio?
2.Why was the "bargain" property at $85,000 not actually a bargain?
3.What should a "pre-flight checklist" include before making any offer?