Multifamily Deal Analysis | How to Analyze Apartments ep. 154

Think Multifamily runs a full three-day workshop on multifamily deal analysis alone — so what Mark shares in this episode is the high-level version, and it’s still more practical than most full courses on the topic.

In this solo episode, Mark Kenney walks through the exact questions he asks when a coaching client submits a multifamily deal analysis for review: what he looks at first, what immediately raises red flags, and where most investors make the mistakes that cost them on the back end.

If you’ve ever wondered how experienced operators actually stress-test a multifamily deal analysis before saying yes or no, this is the episode.

Listen to the Episode

What You’ll Learn in This Episode

The first things Mark looks at in any multifamily deal analysis — year, class, occupancy, location, asking price, and CapEx per door.
Why anything below $5,000 per door in CapEx gets questioned immediately in a multifamily deal analysis — and what the right rehab timeline actually looks like.
How loan type changes everything in multifamily deal analysis — the key differences between bridge loans and Fannie/Freddie on closing costs, CapEx funding, and interest-only periods.
How to compare your underwriting against the T12, PM budgets, and industry standards line by line during a multifamily deal analysis — and what to do when they don’t match.
The exit cap rate trap in multifamily deal analysis — why overoptimistic assumptions on cap rates and year-over-year income growth can make a bad deal look like a great one.

Episode Timestamps

TIME	TOPIC
00:00	Intro / Show open
2:21	Mark Kenney begins deal analysis
3:06	Property basics (year, class, occupancy, location)
3:42	CapEx review & cost per door
4:22	Rent analysis by unit type
5:18	CapEx timeline & rehab duration
6:34	Loan information & closing costs
9:38	Mid-roll ad — FIRE Summit
10:45	Back to show — use promo code PODCAST20
10:56	Deal structure (preferred return, splits, waterfall)
12:18	Pro forma, T12 & PM budget analysis
12:57	Comparing expenses line by line
16:09	Exit strategy, cap rates & annual returns
18:32	Outro & subscribe CTA

Episode Summary

Multifamily Deal Analysis: Key Questions Every Investor Must Review

Multifamily Deal Analysis is one of the most complex skills in multifamily investing — Think Multifamily dedicates an entire three-day workshop to it.

In this solo episode, Mark Kenney distills the multifamily deal analysis process down to the key questions he asks whenever a coaching client submits a deal for review.

The goal is not to replace thorough due diligence but to quickly identify the variables that matter most and the assumptions that deserve the most scrutiny.

Mark starts with the basics in multifamily deal analysis: year built, property class, current occupancy, location, and the gap between asking price and what the buyer is actually offering.

From there, he moves to CapEx — specifically CapEx per door. Anything below $5,000 per door gets questioned immediately in multifamily deal analysis, not because it’s automatically wrong, but because it demands an explanation of where the money is actually going.

On rehab timelines, multifamily deal analysis requires realism: 12 months looks good on paper but rarely reflects reality. Tenants don’t move out on schedule, partial rehabs slow progress, and unexpected conditions arise.

His standard assumption is 24 months, and he walks through the logic of why that protects the underwriting. Rent assumptions matter equally in multifamily deal analysis — his default is no rent increase without a corresponding improvement to the unit.

If a property is genuinely below market, that case needs to be made explicitly, not assumed. Unit size also gets a look because units that are too small can create problems when it comes time to secure financing.

The loan section of the episode is particularly detailed in the context of multifamily deal analysis. Mark walks through the material differences between bridge loans and agency debt (Fannie/Freddie) across four variables: closing costs, whether CapEx is funded in the loan, the interest rate, and the interest-only period.

Bridge loans typically fund CapEx but carry higher rates and shorter terms (two to five years). Agency debt carries lower rates and can offer longer IO periods but generally does not fund CapEx.

He also covers loan assumptions, working capital reserves, contingency budgets, and what to expect from a refi if a bridge loan is in play — including how to spot refi assumptions that are making a year-three cash-on-cash return look better than it actually is.

The final portion of the episode focuses on the T12 — trailing twelve months of actual property financials — and how to use it in multifamily deal analysis.

Mark walks through the process of comparing the sponsor’s underwriting against the T12, the property management company’s independent budget, and industry standard benchmarks line by line.

He flags two common mistakes: underwriting payroll below what the PM company quoted (almost always a bad idea), and accepting repair and maintenance numbers on the T12 at face value without investigating whether they reflect deferred CapEx disguised as operating expenses.

The episode closes with a reminder that this high-level multifamily deal analysis review is a starting point — not a substitute for the full diligence, third-party experts, and rigorous stress-testing that a real investment decision requires.