The Tony Stephan Show · Episode #002

Buying A 12 Unit Apartment For $800K? Multifamily Deal Analysis

With Shelby, coaching client, first multifamily deal search · April 16, 2025 · 57 min

One of Tony's coaching clients, Shelby, found a 12 unit apartment on LoopNet that came with a rent roll and a T12. All the units are two bedroom, one bath, and the asking price is a little under a million dollars. Tony opens the deal analyzer he gives his students and underwrites it with him, line by line.

He starts with income. Current gross rent is $11,465 a month, and Tony assumes market rent of about $1,200, based on what his own 16 unit near Lansing gets for a two bed, one bath. He explains why he likes month to month leases, then sets up the debt: 30% down, a 6.5% rate and a 25 year amortization, with a target debt service coverage ratio of 1.2.

The biggest lesson is operations. The seller charges almost no fees. Pet fees, a small admin fee and billing back part of the $15,000 utility bill add up to about $15,500 of new NOI in Tony's example. He also warns that taxes and insurance are fixed costs that can jump after a sale, walks through due diligence and earnest money, and shows the year three value compared with the price today.

Watch the full episode · Watch on YouTube

Key takeaways

1. Keep the analyzer simple. Tony uses the same income minus expenses sheet on a 12 unit and on a 200 unit deal, and it is what goes to the bank.
2. Month to month leases give you control. Leases that run into next year block the value add plan until they end.
3. Banks want a debt service coverage ratio of about 1.2 on the current numbers. If it is lower, they ask for more down or a lower price.
4. Fees are NOI: pet fees, admin fees, application fees, lease break fees and utility bill backs, added slowly so you do not price people out.
5. Taxes and insurance are fixed costs. Call the city assessor before you offer; in Michigan taxes can uncap after a sale.
6. Always underwrite a 5% management fee and reserves, even if you plan to self manage, because the bank will.

Guest: Shelby

Coaching client, first multifamily deal search

Shelby is one of Tony Stephan's coaching clients. He works long shifts, has a chemistry and construction background, and found this 12 unit apartment on LoopNet while learning to underwrite his first multifamily deal with Tony and Andrea.

Chapters

1. 0:00 Introduction to Underwriting
2. 2:08 Analyzing the Property Financials
3. 7:09 Rent Rolls and Projections
4. 12:35 Debt Service and Valuation
5. 19:22 Operational Efficiency and Fees
6. 29:16 Expense Analysis and Taxes
7. 37:57 Due Diligence and Offers
8. 44:47 Final Valuation and Recap

FAQ

What is a debt service coverage ratio?

It compares a property's net operating income to its loan payment. Tony says most banks and credit unions want to see about 1.2 on the property's current numbers. If a deal does not meet it, the lender will ask for a bigger down payment or tell you to get the price down.

Why does Tony like month to month leases on a deal he is buying?

Control. If most leases run into next year, you cannot raise rents or start the value add plan until they expire. Shelby calls long leases golden handcuffs, and Tony agrees.

How can fees increase the value of a small apartment?

An apartment is valued on net operating income, so every new dollar of income counts. In this example Tony adds pet fees, a $5 admin fee and bills back half of the $15,000 utility bill, which comes to about $15,500 of new NOI without upgrading a unit. He adds them slowly over time so tenants are not priced out.

What does uncapping mean for Michigan property taxes?

When a property sells in Michigan, the taxable value can reset to market value the next year. Tony says the taxes on his 56 unit, which had not sold in 30 years, went from $40,000 to $100,000. After that, increases are capped at 5% a year. He recommends calling the city assessor for an estimate before you offer.

Is the deal worth the asking price?

Not today. At an 8% cap rate Tony's model values it at about $759,000 as is. After rents reach market and the fees and bill backs are in place, his year three number is about $1.49 million. He says he has never bought a deal for what it is worth today; the value comes from what you do after you buy.

12 Unit Apartment Underwriting: A Real Client Deal

A 12 unit found on LoopNet

Underwriting is where most new investors get stuck, Tony says, so he recorded a real session with one of his coaching clients. Shelby found this 12 unit on LoopNet after Andrea Stephan suggested he start there. Most listings he saw had no rent roll or P&L. This one had both, which is why Tony wanted to use it.

All twelve units are two bedroom, one bath. The asking price is a little under a million dollars, and they use $900,000 for the example.

The analyzer

Tony uses one spreadsheet for every deal, from a 12 unit to a 200 unit property. "It's stupidly simple," he says, and it is the same business plan he sends to the bank. On a deal this size most columns stay at zero, but he leaves them in so students can grow into larger properties.

Current gross rent is $11,465 a month. Tony looks at lease end dates first. He likes month to month leases because long leases block any changes until they expire. For market rent he uses $1,200, what his own 16 unit near Lansing gets for a two bed, one bath, then grows it by a conservative 2% a year.

Debt and the 1.2 rule

He underwrites 30% down, a 6.5% rate and a 25 year amortization, which puts the loan at $630,000 and the equity at $270,000. The number he watches most is the debt service coverage ratio. Most lenders want about 1.2 on the property's current performance, and if a deal falls short they ask for more money down or a lower price. After due diligence he prefers to negotiate cash to close concessions instead of a price cut.

Where the money is: operations

The seller shows rental income and one line of other income, and Tony gets excited. There are no pet fees, admin fees or utility reimbursements. If every tenant had a dog at $50 a month, that alone is $7,200 a year. A $5 admin fee adds $720. The owner pays $15,000 a year in utilities, and billing back half of that adds $7,500. Together that is about $15,500 of new NOI "and you haven't upgraded a unit."

He is careful about pace: reach market rent first, then add fees slowly, because pushing too far just empties units. "Every business operates this way," he says.

Expenses the bank will add

Tony applies a 7% vacancy factor even though the seller shows none. Taxes and insurance are fixed costs you cannot manage down, and in Michigan the taxes can uncap after a sale. His own 56 unit went from $40,000 to $100,000 in taxes. The fix is simple: call the city assessor and ask. He also always includes a 5% management fee and $250 a unit in reserves, because the bank underwrites as if it had to take the property back. The third party manager here costs about 13% of income, which Tony sees as upside.

Offers and due diligence

Do not send a broker thirty questions before you submit a letter of intent, Tony says. You will never have all the information when you make an offer. Once under contract, you get a due diligence period to check everything, and if something was not disclosed you can renegotiate or take your earnest money back.

The value after the plan

With an NOI of about $67,000 and an 8% cap rate, the model values the building at about $759,000 today, below the asking price. After rents and fees are in place, the year three value is about $1.49 million, and still about $1.4 million at an 8.5% cap. "I've never bought a deal for what it's worth today," Tony says. If the seller wanted $1.2 million, the deal would not work.

Transcript

0:00 Underwriting multifamily is one of the biggest thing that most new real estate investors get caught up on. That's what we're doing today. One of my coaching clients and I underwrote a 12 unit deal in depth step by step. And he was gracious enough to allow me to post this video on YouTube so I can help you. I'll show you the step-by-step process I not only teach all my students, but that I've personally used to acquire $40 million of multifamily real estate between my wife and I, 258 units. We keep it simple. We keep it short and we get it right to the point. Underwriting can be very complicated, but I teach you how to keep it simple so you can underwrite more deals more quickly and do more deals. If you have any questions about anything with underwriting, as always, leave it below in the comment section. I'm happy to help. If you want to get the deal analyzer that we use in here, I've made it available to you in the link in the description.

0:47 Without any further ado, let's underwrite the deal. But this is a great deal to look at, man. So, how did you find this deal? First off, just on LoopNet. Just on LoopNet, you know, I reached out to Linda and Andrea and I said what I was I what I was doing and what you and I planned to do and Andrea was like, you know, I would start off by just looking at LoopNet and I did and it was like a big a big world just kind of opened up for sure. I didn't know any of this stuff. So, I found it just by kind of searching some of the things that I wanted to look for and then just kind of going through one by one and just kind of getting more of a feel.

1:33 And some of the deals don't have rent rolls or you know P&Ls, right? So, I just kind of kept looking till I found one, you know. Yep. Yep. Yep. Okay. So, reminder and you did good on this one. You got us a rent roll. You got us a T12. I know I know this listing broker actually. I've never done a deal with him. I was under contract for like 30 units with him and then the seller pulled the deal. This was like years ago. I miss these deals, man. These 12 units, they're so simple. Golly, look at this. You have 12 people. So this is a multifamily, what we call a proforma, a business plan, a deal analyzer, all the same. Th this spreadsheet and you can see my screen, right?

2:19 Yep. This spreadsheet is everything. And there are very complicated ones out there. I've paid for them and I'm like, I need a calculus degree just to go through it. I like this. It's stupid. It's stupidly simple. It's easy. I've used this to buy over $40 million of multifamily real estate. It's detailed enough, but it's not too much. And this is what goes to the bank when so when the bank asks you for your business plan or your projections, this is what we send them. But we dial this in first ourselves as investors to just like do a litmitness test on a on a deal. And then when we dial it in, we finalize it. Then we send it to the bank. So this is set up more for larger deals.

3:07 I've added to it as I've gone on. Like I said, I miss I miss this. I miss P&Ls like this, you know, because this is our T12. It T12, as you know, trailing 12 income and expenses, right? I mean, look how stupidly simple and easy this is. Is beautiful. As I've progressed, you know, there's a lot on here. I'm going to leave all this on here for you though because I want I want this like I want you to be able to grow with this sheet, you know, as you get into bigger and bigger deals down the line. A lot of this will make more sense, you know what I mean? But for now, a lot of these columns are going to be like zeros, especially with a mom and pop management company or a mom and pop owner, right? So ju just be aware of that.

3:54 Like if you're like what is what's like there's no clubhouse on a on a 12 unit, you know, but I was underwriting 260 units. There's a clubhouse there. You can rent out a clubhouse and generate income. You know what I mean? So it's also cool. I think I wish I would have seen something like this when I was buying 7 units, 8 units, 12 units, cuz then you start to go, "Oh, wow." So if I have a clubhouse one day, I can rent out that clubhouse and generate income. Like my 42 unit has a really nice common area. We can rent that out for people want to do like birthday parties or just whatever and generate income. So you start to see like wow there's power and scale here because kind of the more the more amenities I have the more ways I can generate income. The more I can generate income. I mean dude look at this revenue. Four 4 million 5 million.

4:42 Look at this NOI. 3 million. Like you just you start to see whoa. It's the same work to underwrite and analyze a 12 unit as it is. This was over 200 units, but the payoff is bigger on the bigger deals, but you got to start with the small deals. Does that make sense? Yeah. It's scalable. It's scalable. It's scalable. And what used to kill me in the beginning, I thought it was so much more complicated to do a bigger deal. There's definitely more line items on a profit and loss statement, but it's still the same profit and loss statement. Like it's just going to be this income minus expenses. But see what I mean? They only have rental income and other income there. There's all these other things which is good for you though because some of these fees as an operator you can add in there.

5:31 So what I'm going to do is I'm just going to zero all this out. This should Yes. Beautiful. Should zero out my rest of my sheet here. Most of these have autopop populated just for like increases and stuff like that which we'll go over. Obviously some of these I've manually put in. So, let me just do this. Yeah. And I gotta say, I've actually gotten, some of these documents from other, brokers that I've left, real agents that I've looked at, and they were not nearly this organized. So, this is the one that I sent to you after looking at like five or six of them. I was like, "Oh, this is this one for me makes sense because it's a good breakdown. It's a lot of information but you know with chemistry backgrounds you can you can 100% 100%.

6:19 So absolutely and that's what I mean dude like you know with your background none of this is you know inconceivable and that's why it's very important too though to understand it's a pretty simple game and now that's why I wanted you and I push you guys so much to just get a bunch of deals sent to you cuz then you start to learn like you're like how you have a deal on market and you don't even have a rent roll. How am I supposed to evaluate this? You know what I mean? So you start to really kind of decipher quickly if you get sent something you're like this is like I can't I can't do anything with this move on because unfortunately that's how a lot of sellers are because when you're dealing I would say under 30 units it's usually a mom and pop owner. So you're going to get unorganized financial. So I'm glad you use this as an example here.

7:07 And that's what we're going to go. So just real quick this is our rent roll. Pretty standard here. This tells us our gross rental income's 11,465 bucks. Perfect. One thing I always look at is I look at when's the lease end. You really like month-to-month leases. Why do you think you like month-to-month leases? If you're going to buy this asset, why would you like month-to-month leases? Well, it gives you more controllability in what you can do, right? Bingo. Bingo. Correct. If they're Look, a lot of these expire in 2026. So, you can't change anything with that tenant. You can't do any of our value ad strategies that we that we talk about and that we'll go over here until 2026.

7:53 So, yeah, it's the golden handcuffs type Yep. Type thing. Yep. So, all this is income minus expenses. That's it. That gives us our NOI. We'll have to make some assumptions on the debt part here, but we have a little debt calculator down here. I have my rent projections sheet down here. Pretty simple. So, let's just start going through it. So, first thing is total gross rental income. What did we just say it was? Whoops. I want you to pull these up as well cuz you're going to read off some of these to me. So, have these documents handy. So let's see here. Boom. Boom. Boom. 11465, right? So, 11465 is current. So, how this is structured, Shelby, is as it performance is like how the property's performing today. And then I look at like year 1, year 2, year 3, year four, year five.

8:42 On a deal like this, I don't really care about year four and five cuz I'm going to refinance it way before then, you know? Okay. So, I'm really just like, hey, where's the ASIS performance? And then most importantly though, what can I where can I be on year one, year two, those types of things. So, and this is all on an annual basis. Again, think about like a profit and loss statement, right? So, annual basis here, income and expenses, all that good stuff. So, all right. So, 11465 is my total gross rent. So, we need to annualize this out. Equ= 11 465 * 12. Boom. Okay. Now, we don't know. We haven't done like massive due diligence on this property, right? Cuz right now, this is just sent for set for like 3 to 2% annual rent growth. You're not going to buy a property that you can just do a three or 2% annual rent growth that you can just change up in here.

9:32 Right? If you want 3%, you just modify it to 3%. I always underwrite very conservatively. Once I get to market rents, I say 2% rent growth, right? That's pretty darn conservative. I'd rather be conservative than incorrect and over, you know, overextend myself, right? Yeah. So, let's just say though looking at this rent roll I don't Oh, they're all two bed, one bath. That's great. Lancing is not really a market. I know I have a property close by Lancing. So, we could Let's just use as an arbitrary example here, but these are all things you would use in due diligence. I know at my 16 unit in a little suburb of Lancing, I'm getting 1,200 for a two bed, one bath.

10:20 So, let's just assume that's what we're going to get. So, in year one here, I'm going to assume I'm going to get everybody up to market rent. And I'm assuming they're on we're kind of just for an example here for speed. Let's just assume they're all month to month. So, we know we can come in this year, start making changes. So, 1,200 times this is 12 units, right? Yes. So, that's 1440. Whoops. It's around 20 25% that you can actually increase which is going to be market. Yeah. Which is huge, right? Yeah. So, wow. Look at that. My gross This is the only variable we've changed so far. My gross rental income has gone from 137,000 to 172,000.

11:08 So, let's just assume that's our market rent. Then every preceding year, I'm going to just do 2% increase just to be safe. Just to be safe. Got it. And so here's here. Cool. So up here too, I just do this for the bank. I say like, "Hey, I'm working to my goal." So on a larger deal, you're not going to be able to do it all in one year, right? On a on a deal like this though, you could say like at goal 2026 and then 2027. So if you have a full year, again, we're just making assumptions here for an example. If you have a full year at those market rents in 2027, you'd be able to refinance this deal. And we can even predict what this deal could be worth because what's the what's the ask price on this deal right now?

11:55 How much are they asking? Let's see. A million bucks, 900 grand, something like that. Yeah, something like that. So many small letter numbers. All good. Oh no, that's not it. Go ahead and keep talking. I can find it. Let's just let's just let's say 900 grand. Okay. Yeah, it's under it. It is under a million. Okay, perfect. So 900 grand. So this part's really important right here, too. This is our debt service calculations. Okay. So I tell everybody every deal nowadays expect to put 30% down.

12:45 So that's just what we're going to underwrite at. So 70% loan to value, right? Shows us our loan amount. Your equity. So this is what you have to bring to the table to close the deal. Now interest rate is variable and it the treasury is all over the place right now. So let's just assume a 6 and a half%. I feel like that could be achievable on a commercial loan. You're not going to get a 30-year AMP with a bank and a credit union. You're going to get a 25-year AMP or a 20-year AMP. But let's say, especially since you're working with me and I'm going to connect you with all the right lenders. We're going to get a 25-y year AMP. Now, this part down here, and as you can see, then it populates your mortgage one here. Okay? Mortgage two would be like if you did like a second line against the property, a line of credit against the property.

13:34 We usually don't mess with this. Because on a deal this size, you're not going to do that. Or what's called a supplemental loan. As you get bigger and bigger deals, that's more common, but we're not going to do that. So, right now, it just says our total. Oh, this is interest only. Okay. So, let's go over this. So, you're borrowing 630,000. Okay. Your interest rate 6.5. If you get any interest only, that's what this little category is right here. On a deal this size, we're probably not going to get interest only. So, see the deal, the deal I was underwriting was a bigger deal. I was going to have 10 years of interest only. So, we need to change this around to where we're going to equal our debt service payment, which is right there. Does that make sense? I don't want to go any further because this is where people always screw this calculator up.

14:20 Now, when you say interest only, are you saying that for a number of years you're only paying the interest? Yeah. So on bigger deals when you go like agency debt which is Freddy M Fanny May they're going to give you interest only. Even on massive value ad deals I've negotiated interest only. So if this deal is like very distressed and you have to do evictions and you have to do you know massive turnovers and massive upgrades it is very fair to negotiate with the bank interest only which means yes you're only paying interest. So you have more cash flow available to put into the property. Yeah. Exactly. Got it. So the most interest only I've ever gotten was two years with a credit union which is very hard to do but something I like to negotiate like on my 56 I got two years but I had to do roofs there.

15:11 I had to reposition you know I had to do a lot of things. So it is a strategic play then. If you have something in mind that you want to be fixing up like and like you said, when you do your due diligence, when you ride around, you start seeing things that are messed up, you're like, "Well, I'm going to have to fix this. I'm going to have to fix that." Bingo. I got you. I got you. Because, but it's also riskier to a bank and a credit union because they're like, "Well, you're not actually paying this loan down. You're just paying interest." Right? So, it's a caveat. You don't want like on a deal like this, you don't want two years interest only, I'll say, because it is nice to pay down some principal. I'm not going to lie. When you go to sell or you go to refinance, you're like, "All right, I've actually been paying this loan down versus like just the same damn loan amount every month." And on your PFS, your personal financial statement that I've sent you and you're doing every month now, you actually see your net This is how your net worth goes up.

16:09 You get what I mean? Because you borrowed this 630,000 and it gets paid off every month. But who pays it off? Cuz it's not you. Yeah. It's my tenants. The business pays it off. So your tenants are building your net worth every month. It's nice to see that you start to be like, "Okay, this is why I work those crazy 16 hour shifts because when I'm not working, they're working hard to pay my debts down. It's a good feeling. So, I'm working hard to get this 270,000 to buy the asset and then my 12 residents are working every day to pay down my debt. Make sense? Yep. Makes sense. So, always make sure when you are doing your debt to update this cuz if this is not updated, it will screw up everything.

16:56 Okay? So, purchase price, loan amount, interest rate, amortization, interest only period. If you get it, just plug it in there. But we're just going to say it's going to be a straight principle and interest. No secondary loan, none of that. Okay. So, we'll get down to this. This is the most important thing you're have to look at is what's called your debt service coverage ratio. Every bank and credit union's a little different, but for most of them, they want to see a 1.2 here. So, obviously, I haven't put in any expenses, so it's a 2.5, which is never going to happen. That's like a That's like seeing a unicorn and Sasquatch having sex together in the ocean. It's not going to happen. Very slim chance. Very slim chance. If you do, you better buy it like that day.

17:41 Get a lottery ticket. Yeah. But this is what's going to matter the most. They want to see based on the ASIS numbers. And this is what makes deals very difficult nowadays is a 1.2 debt service coverage ratio. So, we'll plug it in here and we'll see because if it doesn't meet a 1.2 debt service coverage ratio, they're not going to want to fund the deal. They're going to either ask for more down payment because then that lowers your debt payment cuz you're borrowing less money or they're going to go tell you to get a price reduction, right? Which isn't always possible. So, this little calculation right here makes all the difference. This is the main thing I look at. I look at where can I take the income to in year 1 and I look at where's my debt service coverage ratio. Make sense? Yes. So, I have a quick question. Can you kind of I don't know if the right term is force equity, but like before you buy it, say that you are in deals talking with the with the seller and you're like, "Well, let's lower down the payment because I know that I'm going to have to redo the plumbing in this or I'm going to have to redo the stuckle on all the outside." Yeah.

18:46 Yeah. After you complete what's called due diligence, then you can negotiate for anything you find. And that'll bring that to 1.2 or like closer to 1.2. It could it could if you lower the price. What I usually like to do is do what's called cash to close concessions. So, it actually lowers your down payment amount. I like that a lot. You know, on my 56 unit, I got 150,000 in concessions. I could have lowered the purchase price by 150,000, but I want that 150,000 in my pocket, you know what I mean? So, it ju it just depends on the strategy, you know, it depends on the deal. Yeah. So, all right, let's go through this. So, when we look at his T12 here, all we see is other income. Now, you would ask, hey, so 2500 304, we you would ask what's other income, right?

19:38 Because I can mean a multitude of things. Cuz I should have a thing here for other income. See, I cuz I like to break it all down. So, let's just say these are like month MTM is month-to-month charges. Let's just say he has 25 2530 in month-to-month charges. Okay, there is so much money being left on the table here. So, when you see this where the only income is rental income and maybe one other by line, you get super excited. Because what do we always teach you? The money's where in the It's in the details or it's in the I'm sorry. Go ahead. No, you're right. In the details of the operations, right? Okay. So, cuz we buy deals like this and we say, "Oh my god, we can charge an admin fee.

20:29 You charge an application fee every time someone fills out an application, right? Utility reimbursement. Lease breakage fees. People break their lease early. Happens all the time. You charge a fee for that. Like if you if you call up Verizon, say, "I'm gonna break my contract. I'm moving to AT&T." What do they do? They're going to tack on a fee. Exactly. So, why would you not do the same? This is This is why these deals, while they're not super scalable, you can make a crap ton of money on them with the BRRRR strategy by implementing what we just call prop professional management. Like we operate like we own 10,000 units even though I own an 8 unit, a 12 unit, 16 unit, 42, 56, and 100 unit.

21:15 You know what I mean? Like Yeah. And that's what I'm teaching you to do. So like pet fees. You're telling me no one there has a pet now? Might be. They might be zero pets, but probably not. They probably have pet fees. You don't you don't catch. So let's say as you do your due diligence, Shelby, now you're looking at, okay, this is just where he is today. Wow, I realized everyone there has a dog and dogs are 50 bucks a month. So, what's 50 multiplied by 12? Do you have your calculator? 600. 600. What's 600 * 12? Cuz 12 months in a year. 7200, right? Yeah. For pets, is that right? 50 * 12* 12. Yeah. Wow.

22:01 So, okay. Say everyone there has a dog and he's not charging. You just created $7,200 in new NOI, right? And these are the details you're referring to as far as like breaking these down and things that you can essentially justify making little increments in. We charge and now you're not going to do this all overnight because you just raised rent pretty significantly in year one here. Let's say you do that in year one, which is usually what we like to do. Hey, get to market rent, right? People are going to move out. You're going to have to turn units. You're going to have to upgrade units. Cool. Then year two though, we start to look at the management fees. We can we don't want to increase rent above market, right? We don't want to price people out. But then we say, you know, every person here should have an admin fee.

22:49 So what's 50 time or $5 time 12? 60. What's 60 time 12 months in a year? 70 720, I think. I'm giving you easy ones, man, because they're all the same. All the same. So, 720. Let's say you just slap on a $5 admin fee every month to process payments, to go through your bank accounts, make sure everyone pays. Makes sense, right? Makes sense. What we're going to get into too is ev every apartment complex who is smart builds back utilities these days, right? And in all of our properties, our goal is to build back all utilities. Can you what do you mean by that? Build back. So like let's look at his T12.

23:36 Whoops. So see his expenses. He pays 15 grand a year in utilities. Okay. Now he didn't break any of these down. So again, very mom and pop. It just says utilities. Like we don't know. Is it gas? Is it electric? Is that water? Is that pest control? Is that you know what I mean? So, in your due diligence, you will uncover what does utilities mean, right? But our goal is to take this $15,000 bill and bill it back to all the tenants there. So, they're all paying their utilities because that's a huge way to increase NOI. And we do that every one of our properties.

24:23 Now, again, we don't do it immediately. We do it slowly over time because you can only raise rent so much. You can't price people out. You know what I mean? Yeah. Yeah. It's the same in California. You can only do it by 10% or something like that. Yeah. There's no rent control here. So, there's no limit on how much you can increase rent. But if you if you jack up rents, people just move out. You know what I mean? So, there's a methodical way of doing it. But, yeah. Does that make sense about like utility bill back, all that good stuff? Yep. Yep. I get it now. Yeah. So, as we would deep dive deeper into this, we start looking at these fees and let's just say, and again, he just has utilities, so I have it like water, gas, water reimbursement. Let's say in year two, we're able to build back half of those. So, that's 7,500.

25:10 So, dude, just by fee management, you have created $15,000, 564 bucks in new NOI. Wow. It's freaking substantial. And you haven't upgraded a unit. You haven't done you haven't you haven't done any of that. Th This is what people don't get. And this is how we've done 500% refinances without doing crazy unit upgrades and all this. We run it like a real business. And dude, people have asked, well, oh my god, if I start doing all this, is everyone going to move out? No, because everywhere you go, this is how businesses operate. Bro, I bought a coffee today. I slide my card. It automatically charges me 20% tip.

25:58 I have to be an and click no tip. I'm not going to do that. I'm like, shout out to y'all up in here. Sure, I will tip you 20%. To fill my damn drink. Yeah. Like h how many contractors have you ever worked with that they're like if you pay with a credit card I'm slapping a fee on so I want cash or a check right? Every business operates this way. So you got to get with it. You know especially in California man it's like service fees service charge fee charge everything. Yeah. Yeah. Yeah. Stay at a hotel there. There's like 10 fees. You know what I mean? So they expect it.

26:47 Okay. They're like, I get it. I mean, this is just getting with the program essentially. It's just getting with the program. But see why we say operations is how you make the money. I totally see that now. Now that you're breaking it down like this and with me and my construction background, I can already figure out like other little things that I could probably throw in there and look for when I do my due diligence. I mean, he has nothing in damages. So, if someone wrecks your apartment, you get to keep their security deposit. And if they wreck it above that security deposit, you get that money. Now, you got to take them to court and take them to a money judgment, but you're going to get that money. We've gotten that money from people who have thought they were going to destroy our units. Dude, we go get the money. So, all that then shows up as income. So, let's just say you had 5,000 in damages collection.

27:35 Laundry. Look at that property right now. Is there any laundry? There's no laundry on site there for 12 units. They don't have washer and dryers. No, but that would be a big upgrade if they do, right? So I would go over there, make sure that they don't have it. If they do have it, figure out where I can put it and then offer that as something every month, you know, that they have laundry on site and then also get money from it as well. Bingo. Because look at it like this, dude. So, at my 56 unit, there are eight buildings and they all have washer and dryers in the basement. He had zero dollars in laundry income. Why do you think that was? Yeah. I don't know. But like a missed opportunity.

28:21 Oh, no. He was getting the money, but he didn't want to report it. He didn't want to pay taxes on it. Yeah. So, that's what these stodgy old owners will do. They just won't report the laundry income. But you're going to report it because it's NOI. You get what I'm saying? And we don't like to defraud the government here. We already get enough benefit only real estate. No need to defraud them over 1,500 bucks. I mean, so you see no laundry, you get excited because you're like, "Okay, if there is laundry in there, I'm going to actually report it." And that's just an easy N. I can't tell you how many small buildings I've bought, they never reported the laundry. So that's an easy NOI booster. So, you're looking for little key things like this. So, now look, we took our total income from 140,000 to 200,000 in year two.

29:12 Freaking awesome. Freaking awesome. This is what's called vacancy. So, they're always going to apply a 5% vacancy factor to any deal. Even if it's 100% full 100% of the time, the bank is going to underwrite till 5% vacancy factor. I do 7% just to be ultra conservative. So that's like when someone moves out, loss of income, commission to fill it, right? You know, so things like that. So don't ever if they're like so like again, let's look at his T12. He has nothing for vacancy, right? Or loss of income or what's called bad debt, like just income not collected. He has nothing. So the he's probably lying. Did the broker put together an OM on this?

29:57 That's one thing we are missing. No, everything that you have I think just those three. It was the brochure, the 12 month, and the rent roll in the Yeah. And the rent roll. That's lazy on their part. All if a broker hasn't put together an OM, I get a little concerned of like, do you really want to sell this? Is this deal really available? Whatever. But hey, what is OM? Like operating management or something or offering a memorandum just like a sales brochure. It's all it is. Yeah. Okay. So, all right. Cool. That's that. So, again, a lot of these you're, you know, you're not going to have just today, but it's cool to see what Whoops. It's cool to see what is also available in the future. And these are just some of the things you can build back on. There's even there's even more than this.

30:44 Okay. This is great. This is getting my imagination just flowing right now. Good, man. So there's this is our income, this is our vacancy factor, this is our total revenue. Okay, so we've got half the equation of multifamily valuation NOI. Now let's fill in the expenses. So let's go T12. All right, renting and promotion. Okay, 1,531 bucks. So we'll put this under do marketing and advertising 1,531 bucks. This is how you're going to fill your units. You can use apartments.com on a deal like this size and especially you buy here in Michigan. We'll use our brokerage to lease for you. So you won't have to pay this stuff. But this is you know Zill for lease.

31:32 This is Facebook Marketplace is free. Apartments.com on a on a deal this size in my experience has not been worth it. I mean they charge you a lot. It'll definitely be more than 1,500 bucks for the year. Probably like 300 bucks a month. You know what I mean? So could be 3,600 bucks a year. So this is something you want to look at too. Let's say you are going to market on part.com because you're like, "Hey, I don't have time to do Facebook Marketplace and deal with that." So just because he or she is only paying 1,500 bucks, you now have to update what your cost is going to be. So just because he can run it a certain way cuz maybe he's doing god knows what. Google pay-per-click ads, I don't know. Yeah. You're going to update what your cost will be. And that's where a lot of times sellers can get a bit like shell shock of how expensive things have been or how expensive things have gotten cuz they haven't they haven't like bought anything in years.

32:31 You know what I mean? So that's a very important thing. Don't just assume just because he's paying this that's what you're going to be paying. Everything always goes up. We're we live in an inflationary society. The main thing, Shelby, and make sure you like note this and write this down, is insurance and property tax. These are the big ones. Depending how long he has owned it for, these could go up substantially. Substantially. And this could just destroy a deal if you're not aware about it. Make sense? The insurance and property tax. Yeah. Because those are long-standing. Those are going to be if it gets sold every year, those are still going to be sticking with And they're fixed cost. I we can't outmanage property tax. Like there's nothing we can do to lower it.

33:17 When it's set, it's set. You could try to appeal it, but insurance, you can't you can't lower insurance. Once it gets set, it's set, dude. It is what it is. So, those are what's called like make sure you write that term down and understand that fixed cost. You cannot we cannot adjust those costs. They're set. They're set. You can shop them the insurance, but they're set. They're set. So, like, all right, let's get on here. Taxes and insurance. Oh my god, he put them all in one category. Why would you do that? Taxes and insurance. Okay, not helping us. So, see, this is where then this is a great example. You'll have to go back and be how much are taxes? How much are insurance? Cuz you don't pay taxes and insurance together. You know what I mean? So, we're just going to put in 82.

34:06 Let's just do half and half. 4,100. I can't imagine property taxes are $4,100 unless he's owned it since the stone age. And 4,100. Now, you'll see this doesn't auto adjust because in Michigan, and every state's different, so you have to check out your state laws, there's what's called uncapping. So, when you sell a property, let's say you bought this property in 2025, in 2026, those property taxes uncap. They have the ability to raise the taxable value to what they deem market rate, market value, and your taxes can go up significantly. So like when I bought my 56 unit, it last sold in 1993. I bought in 2023. So I bought the deal 30 years since it last sold.

34:55 The taxes went from $40,000 to $100,000 because there had been 30 years since the last time it uncapped. Once it uncaps in Michigan, it can only go up a max of 5% a year, but it's supposed to be the rate of inflation. So, if inflation is very low, it goes up maybe 1 or 2%. If inflation's high, it will go up 5%, but it can't go up more than 5%. Places like Florida and Texas don't have that. They go up 30% a year, every year. And they just they just say just go appeal it. Go appeal it. You know, so okay, we would have to dichotomize this. And again, you're learning you're learning like taxes insurance should never be grouped together because you don't pay them together.

35:44 So they should be they should be byelined out. So let's just say for example, this deal I mean if his taxes are $4,000, dude, it has to have been sold a long time ago. So let's just say it's going to triple. It's going to go up to 15,000 and let's just assume your property taxes are just going to double 8,000 bucks or I'm sorry, your insurance is going to double. So now you see it then auto adjust for the rate of inflation. But these two go up when you buy it. Now tax or insurance, not always, but most of the time it's going to go up cuz insurance has just gotten stupidly expensive because of like all the natural disaster stuff like that. So any questions about taxes and insurance? No. No. And I feel like if you didn't tell me that would have been a rude surprise. Yes.

36:31 After buying. So this is this is something too, dude. People always get wrong on when they're when they're doing these and then they get a deal they're interested in. They send it to me and I got to be the bearer of the bad news and I'm like, "Hey, dude. You didn't uncap the taxes." So if you're like, "Well, Tony, how do I know what the taxes will be?" You just pick up the phone. I mean, dude, look, I'll literally do it with you. Lancing property tax assessor. This is how stupidly simple it is. City assessor. Jennifer. I saw a name somewhere. It's like Jennifer Serski or something. Oh, here we go. You can How do you How do you say that last name? I have no idea. You guys Does she look nice or mean? She looks nice.

37:16 She's smiling. I' I've seen I've seen some where they're grinning. I'm like, "Oh, you they're about to me." Looks like my charge nurse, and she's hit or miss. Yeah, she kind of does have a nurse vibe to her. I agree. So you pick up the phone, you call, and you say, "I'm looking to buy one, two, three ABC apartments. Do you have an estimate of what my taxes will be?" And they'll give you an estimate. It's so simple and easy. You'd be surprised of how many people don't do it and then they go, "I didn't know my taxes were going to go up." Well, ignorance is not an excuse. You know what I mean? So, stupidly simple and easy. Don't, like I always tell people, don't be freaking lazy. Look, that took 2 seconds. You pick up the phone, call then you know your taxes. Okay. So again, not much else on here. So, admin fees.

38:03 So, see, look, he's paying administrative every month. Maybe he has an office, maybe he his cell phone he's writing off, I don't know, but he's not billing it back. Like, that's so stupid, you know? $4,1952. So, admin, leasing. So, see, like leasing, admin, payroll. As you get to bigger properties, excuse me, you'll have people on payroll. You have people paid salaries by the properties, right? So right here, this just goes administrative fees. So, 4125. Cool. This needs to be auto adjusting. There you go. Perfect. Okay. So he's got that fee or I'm sorry, that expense. What else do we have on here? So, you just go line by line and you plug it in to the spreadsheet.

38:52 Very simple. Other administrative. What's this? So, wow. He's got It's funny. He broke down administrative and then other administrative, but he didn't break down taxes and insurance. Maybe that's for the paper weights. Yeah. Right. So, like 400. Yeah. So, you'll have to ask though. You would go and ask him like what is this? Like, can you show me what this is? Because you need to know like what like as you buy the property, what are you paying for? What is this stuff? You know what I mean? So, while we're on that, you see a couple numbers in the red. One is in December 24 back on that 12 on that T12. It says December 24 at -1,800. And then there was another one April 24th, 1200.

39:40 And that was under the maintenance and repairs. So that would be something more than you would want to see like how is this broken down because you got negative, right? What is this? Too bad. So, you were you got a you got a refund for $1,200 for maintenance. Like just Yeah. What is that? You know what I mean? Now, very important though, too. You could ask the broker these questions before submitting an offer, but if you bomb the broker with like 30 questions and you haven't even submitted an LOI, a letter of intent, cuz remember it goes letter of intent, then purchase and sale agreement, they're not going to answer. So, these are like questions you ask in due diligence.

40:31 Again, you can ask a couple. Just be like, "Hey, I want to submit an offer. I need a couple clarifying questions, but I'm gonna submit an offer." But if you're just like, "What's this? What's this? What's this? What's this? What's this?" It's like it's a it's a good way to like identify yourself as an amateur. So, like, dude, you're not even writing an offer. Like, I'm not just going to spend all this time going through all this with you. Because again, a more a more experienced investor will know this is what a mom and pop deal is. It's all a bunch of gobbly goop. Like he's got 8,000 in administrative. He somehow I mean this makes no sense. Somehow he's paying more in admin than he's paying in taxes and insurance. Yeah. Yeah. Makes no sense. I mean like Yeah.

41:17 It makes no sense whatsoever. And that's not a very deep dive either. That's just on the same that he gave us. Correct. So, and they might they might say too, hey, we're not he's not going to disclose any of that until you're under contract, which is totally normal because this is his business expenses and income. You know what I mean? Right. Right. And that's where the give and pull kind of kind of goes. You don't want to ask all these questions and then not give any kind of commitment. Totally. So, dude, like when I wrote underwrote this 260 unit that we offered on, I didn't have any clarifying questions answered on the expenses. I had to and I mean, dude, I think you saw in there it was 34 million bucks that we offered. And I had to be willing to do that and then get all my answers under due diligence.

42:06 The bigger, more sophisticated deals you do, that's how it works. They give you what they give you. You underwrite it. You make your assumptions. And this is this is the teaching moment here. Once you're under contract, then you will dial in all of this. And then you decide, can I do the deal or not? You will, very important to understand, you will never have all the information you need when you make an offer. Bro, you'll never have all the information when you buy the deal, but you'll have a lot more. You know what I mean? So, you got to be okay with this because this is where people go crazy. They just do spreadsheet analysis over and over and over, paralysis by overanalysis, and they never buy anything. You have to understand you will never have every piece of information you need.

42:53 But you got to be okay with that. You get as much as you can. Then once you're under contract, you have the right to get everything you c you can get cuz now you're like, I'm under contract. You know what I mean? So under contract just seems like a very scary statement for, you know, for a lot of people, I'm sure, like that. But when you're under contract, you're your commitment is only that you're looking more into it, right? 100%. Yeah. When you sign a letter of intent, after the letter of intent is signed, you do a purchase and sale agreement. Purchase and sale agreement is a binding agreement. Then you wire over your earnest money deposit, your EMD. Yep. But you have a Especially like when you work with us, we'll spell this all out for you. You're going to have 60 days to go through everything about this property, physical, financial, appraisal, environmental, to make sure it checks all the boxes.

43:45 If at any time you find something that is not disclosed or wasn't as interpreted, we get to renegotiate. And when we renegotiate, if they're not, what let's say, let's say he's just lying and the property taxes are 20 grand a year or let's say you find out they're going to go up to 40,000. You're like, "Dude, I can't pay this amount of money. I didn't I didn't know it was going to go up to 40,000." They can either renegotiate or you get your EMV back and you walk away. Gotcha. That's so much clearer that you explained it like that. Okay. Yeah. It's you're doing due diligence on buying the business, right? And that's like your stakeholder. Yeah. Your earnest money is like, I'm here with you, but if I find anything, then I'm going to split 100%.

44:33 Your earnest money shows your commitment, right? But it's totally refundable. Well, it depends on the contract, right? You could say, "I'm non-refundable on day one. Don't ever do that, right? We won't let you do that." But yeah, that's your protection. So, let's finish this up here and see where we fall. So, management fees. Okay, so he's got payroll and management fees. Interesting. He might have a third party manager running this. That's even better news. Wow, look at this, dude. And that's even better news because that allows more of a variable that you can control. Bingo. And the expenses are always too high and the income's always too low with third party management. I don't care if I offend somebody. It's the truth, bro. Look at this.

45:19 They're charging seven They're charging $18,000 on a property that generates $133 grand. What percentage is that? Can you do that for me? Cuz you're probably better than Over 10%. Yeah, that' be like 11 12 13% something like that. Yeah. 13% of your top level income gone plus all these other whatever else they're doing. Wow. 17 grand. All right. So, payroll maintenance. So, management payroll. Here we go. So, we're just going to call it 18,000. We'll just round up. Now, any under So, you're not going to pay a management fee because you're going to manage yourself, but any bank will underwrite to 5% of your gross rental income, which is only $8,000.

46:09 Okay? So, you very important to know this. You always have to include a management fee in your underwriting because a bank's going to underwrite as if they have to take the deal back. What's their cost to run the deal? Well, they're going to have to pay a management company and industry standard is 5%. Like you said, theirs is way higher. Gotcha. Right. Okay. Also, there's no reserves on there. So, you're going to have to always underwrite to 250 bucks times the unit count. So, per year, they're expecting you to put 3,000. And then I just always increase it, but it's 3,000 a year in reserves away for rainy day fund. Again, just the standard. That's why I put in here, 250 a unit. So, you have to include that because when the bank underwrites the deal, that's what they're going to look at.

46:56 Make sense? Okay. Yep. Yep. All right. Well, should be almost done here. Whoops. I don't know why he sent this like tax assessment. Maybe because he wants to see Maybe let's see when did it last sell. So, he's up to date on his taxes. Cool. I don't know if it said when it last sold. Yeah, doesn't say. All good. So you did include that, which was nice. So, I guess we could see if he was lying or not. Oh, this is the right roll. I'm never assuming they're lying, but I'm always just cautious. All right, so utilities 15292. So again, I break mine all down, but we're just going to plug them all in here.

47:42 15292. But you will do that. You'll go find out how much is electric, how much is gas, how much is water, and you'll break that all down, right? Because those are other ways in which you can save. 100%. 100%. And like what I don't see on here, Whoops. What I don't see on here is grass and snow. So who's cutting the grass, right? Who's shoveling the snow? Is he doing it? Is the management company doing it? I know they're not because they don't do that. Is that part of utilities? There's no pest control. There's no trash. Like, on a property like this, you're going to have a dumpster there. So, where's that? Where's that at? Is he not including those on here? Those are all things you have to get to. We had a we had one of my students, he was buying a deal and they had nothing in there for trash.

48:33 And we go to the property, there's a freaking dumpster out there. I'm like, "Oh, they picked this up for free." You know what I mean? These are just things you have to like identify and catch and they go, "Oh, yeah. Whoops. We forgot." Yeah, I'm sure you did. But, you know what I mean? It's part of it. Maintenance and repairs. So, he has Yeah. Wow. 14,840. That's pretty high. See, third party management, maintenance and repairs. Maintenance and repairs. So, repairs and maintenance. 14 1480. I'm going to tell you on a deal this size, dude. Especially when you have good contractors. I depending on the shape of the units. Obviously, these again, we'd have to confirm and due diligence. If they're nice units, something like this could be like 6,000, 500 bucks a unit.

49:19 When you use good contractors who aren't going to overcharge you, some management companies do maintenance, but then they charge you their hourly plus a fee. Yeah. So like the third party management company we started with and quickly fired, they would charge whatever it was per hour plus 30%. So if the maintenance was 10 grand, we paid 13 grand. The 30% was to manage plus all their management fees. So you're like, "What the what the heck?" You just get a local good handyman who's reputable, save a lot of money. So I already see like right there. Now if all these units are bombed out like World War II, then we have to change this.

50:05 Okay. Well then, so if that is the case, then you can swing that when you start doing your negotiations. 100%. 100%. So his NOI is 67,479. Yeah, it's right where that's right where mine's at. So give or take a little bit. So NOI is income minus expenses, right? Now remember NOI does not include debt service. It does not include your mortgage payment. So do you remember I said you have to be above a certain one or I don't said it a certain debt service coverage ratio. Do you remember what that was? 2.1 or 1.2. 1.2. There we go. Yep. So right now as is this deal cash flows, but remember the bank's probably going to add in all these fees.

50:57 So they're going to add in I mean you're already paying management payroll. They would add in reserves. So let's just add this in cuz even though he's not paying it, the bank's going to underwrite it and add it in. Everything else I think is pretty standard on here. So if you add that in, it just maybe meets the thing. But what you could argue is like, dude, look how much they're charging in management fees. Look how much they're charging in maintenance, repairs and maintenance. So I would say as is this deal would work 1.2. So 900 grand 70,000 6.5 or 70,000 70% leverage 6.5% rate. Now this part right here is very important because this is your valuation. So, let's say for this area, this area is probably like an 8% cap rate because it's not the best area.

51:49 So, you know the magic formula. NOI divided by cap rate equals my valuation. Y So, all I have to do is go in here and change the cap rate. So, 8% expressed as a decimal is there. And we'll go over this and then we'll do any questions and then we'll wrap it up. Very simple. So, I just have to modify all these because again, depending on the area, you'll just adjust this cap rate. Boom. Let's just leave it here cuz like I said, that's about as far as we're going to go. And then, price per unit is right here. That'd be sick. 3,000 bucks a unit. There's 12 units.

52:35 So, you just have to adjust how many actual units are here. So see this was set for 260 176 unit I was looking at never changed all these. So again let's just say we go to like right about here year four year three whatever this is. All right so you're going to meet your 1.2 debt service coverage ratio. You're almost there. Okay. At a 8% cap rate this deal is worth 759 $759,000. You're paying 900,000. This is where most people freak out. They're like, "Oh my god, I'm overpaying. It's not worth it." And you're right. The deal is not worth 900 grand. It's not on paper. But look at look at where it is in year one.

53:22 Yeah. Okay. When we start doing everything and then year two when we're like really slapping it in. So maybe like we're going to look to refinance in 2028 cuz we are in progress and I just put these little notes up here to explain to the bank like what my goal is, you know, like, hey, in 3 years I'm going to come back to you to refinance and they can see it on your business plan. But wow, look at that. In year three after you do everything, the building's worth 1.487 million. I mean, you're doubling it. You're doubling it in valuation essentially. Yeah, absolutely. So, this is the BRRRR strategy. You're buying it, right? You're rehabbing it, but you're improving it. You're fixing it up, right?

54:09 You're renting it out. You're running the business more efficiently and effectively and profitably, and then you get to refinance. And that's what it's all about. So, we could safely assume now cap rates can go up it and interest rates can go down, they can go up. We can't be clairvoyant. But assuming even if let's just say cap rates went up a little bit. So you went up to an 8.5. Okay, it's worth 1.4 million. So you pay 900 grand for an asset that in two years is worth 1.4 million. That's what you have to look at. I've never bought a deal for what it's worth today. I've always had to bridge this gap.

54:57 Now, if he wanted, let's say he wanted 1.2 million, you can't do the deal because look, you're not going to meet your debt service coverage ratio. You're negative cash on cash, excuse me, your negative cash, your negative cash flow. That just doesn't make sense, right? And like you're paying 1.2 million and your high end, it's only going to be worth 1.4 1.4. It's like really not that much meat on the bone. So this is where all this really comes into play. You I mean let's say let's say you talked him down to 700 grand. Dude, it gets even better. You know what I mean? So like that is the multifamily analyzer in a nutshell. Again, looks a little intimidating. Very simple. Down here I just put like my rent projection. So like you would go two bed, one bath.

55:45 Again, it's very simple. There's only 12. So like what's my low projections? We said like 1,100 it's my high projections 1250. You know, I just like to do little stuff like this so I can show the bank then like, okay, 1,100 * 12. Then you can do 1320 * 12 1320 just to show the bank like what your plan is. You know what I mean? Whatever. Do 1320 x 12 stuff like that. But yeah, that's this in a nutshell. Questions for me? I think I've I think I've asked the questions that I've had as we've been going. I don't think I really have any big cutting questions right now, but I will say that the more that I look into this, the sometimes it can look like a big old scary monster, but I think when we start breaking things down and figuring out what we actually do have control of, it's not that bad, man.

56:38 No, it can feel cuz you've never done it before. But that's what I'm that's why I really want to show you, dude. Like, you've done you've done things harder than this. Like you've done chemistry equations way harder than this. You know what I mean?

Topics: Underwriting, Deal Review, 10+ Units, BRRRR, Property Management

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   A client couple underwrote a 17 unit offered with seller financing. Tony checks their work and explains why he would pass.
8. Episode #018: He Bought An Off Market 10 Unit Apartment After Joining My Coaching Program
   With Nick Riley, mentorship client, construction professional and sole provider · April 28, 2026 · 27 min
   Ten years of almost buying, then an off market 10 unit within about two months of joining the program.
9. Episode #017: How One Duplex Became A 10 Unit Apartment Through 1031 Exchange
   With Daniel, mentorship client and barbershop owner from Brooklyn · April 22, 2026 · 20 min
   A $525,000 duplex in New Jersey, a 1031 exchange, and an off market 10 unit in Metro Detroit with seller financing.
10. Episode #016: New Multifamily Investor Buys 19 Unit Apartment (Deal Breakdown)
    With Victoria, mentorship client, investor and tax business owner from Detroit · April 5, 2026 · 28 min
    From a $1,000 land bank house in 2017 to a 19 unit in Detroit: Victoria on cash flow, scale and pulling the trigger.
11. Episode #015: Small Multifamily BRRRR Breakdown: A 13 Unit Apartment With $500 Rent Growth
    With Walter, mentorship client, former sheriff's deputy and house flipper · March 29, 2026 · 33 min
    A 13 unit that last sold over 50 years ago, rents at $450 to $545, and a client who beat two cash offers to get it.
12. Episode #014: Teaching Our Clients How To Manage Their 10 Unit Small Multifamily Deal
    With Nick and Kaylnn Riley, mentorship clients from Arizona who just closed on a 10 unit · March 12, 2026 · 13 min
    Behind the scenes of a coaching day: the deal is closed, and now the Rileys learn where the money is actually made.
13. Episode #013: How Much Can I Pay For This 33 Unit Apartment? (Deal Breakdown)
    With Tony Stephan · February 19, 2026 · 18 min
    A client sent Tony a new construction 33 unit in Florida. He reads the offering memorandum live and decides whether to pass.
14. Episode #012: New Multifamily Investor Is Buying A 50 Unit Apartment (Deal Breakdown)
    With Tony Stephan · February 3, 2026 · 18 min
    A brand new client put an off market 50 unit under contract. Tony's checklist for deal or no deal, with the math.
15. Episode #011: Buying An Off Market 10 Unit Small Multifamily Apartment (Client Success Story)
    With Daniel, mentorship client, entrepreneur from the New York area · January 6, 2026 · 16 min
    Daniel sold one duplex and bought a 10 unit: two green houses for a red hotel, with seller financing and a 1031 exchange.
16. Episode #010: Small Multifamily With Massive Profit: $700K on 12 Units
    With Tony Stephan · November 11, 2025 · 11 min
    A client's 12 unit on the whiteboard: modest cash flow today, and about $768,000 of equity from bringing rents to market.
17. Episode #009: 24 Year Old Buys 14 Unit Multifamily Apartment (BRRRR Method)
    With Nick, mentorship client, 24 year old construction business owner · July 27, 2025 · 16 min
    He started raking asphalt at 15. At 24, Nick runs a 60 person construction company and just bought his first 14 unit.
18. Episode #008: Why He Sold 8 Single Family Rentals To Buy A 12 Unit Small Multifamily Apartment
    With Dr. Ade, physician, business owner and Stephan Group client · June 1, 2025 · 15 min
    A surgeon traded eight scattered single family rentals for a 12 plex and a duplex through one 1031 exchange.
19. Episode #007: Buying a 14 Unit Small Multifamily Apartment for $1.8M?
    With Tony Stephan · May 27, 2025 · 19 min
    A clean 14 unit with upside for a first time buyer: Tony adds up fees, bill backs and savings worth about $714,000 of value.
20. Episode #006: How These New Real Estate Investors Bought 23 Multifamily Units In 1 Year
    With Hugo and Joe, coaching and Stephan Group clients from California · May 25, 2025 · 15 min
    A 12 unit in April, 11 more under contract with 5.5% seller financing a month later: Hugo and Joe are not slowing down.
21. Episode #005: I Can't Believe This Apartment Is Only $1M! Multifamily Deal Analysis
    With Tony Stephan · May 11, 2025 · 33 min
    An 18 unit collecting a fraction of its market rent: a big problem with big upside, underwritten for a coaching client.
22. Episode #004: Buying A 9 Unit Apartment With 5.5% Seller Financing
    With Keith, mentorship and Stephan Group client, roofing business owner · May 4, 2025 · 32 min
    Keith and his wife Angela skipped single family and bought a 9 unit in Clarkston with seller financing at 5.5%.
23. Episode #003: Buying A 12 Unit Apartment For $1.5M? Multifamily Deal Analysis
    With Jerome, coaching client trading single family rentals into multifamily · April 29, 2025 · 54 min
    An off market 12 unit with a very light P&L, and the creative ways Tony adds NOI beyond raising rent.
24. Episode #001: How This Out of State Investor Bought His First 12 Unit Multifamily Apartment
    With Hugo, mentorship and Stephan Group client, W2 worker from Los Angeles · April 13, 2025 · 27 min
    Hugo bought a Metro Detroit duplex he has never seen in person, raised the rents in year one, then traded it for a 12 unit.

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