7 Signs You’re Not Ready for Your First Multifamily Deal
Think Multifamily | Mark Kenney
Landing your first apartment deal feels exciting. It’s validating. It feels like the start of something real.
But here’s the hard truth: jumping in too soon doesn’t just waste time—it can cost you credibility, capital, and opportunities you may not get back.
At Think Multifamily, we’ve seen eager investors rush into LOIs with zero experience, no team, no money lined up, and no systems—just enthusiasm. And while enthusiasm is great, it doesn’t close deals.
If any of these 7 Signs below feel familiar, you may want to slow your roll before you sprint at that big deal.
1. You Don’t Know the Numbers That Matter
🔍 The trap: confusing NOI with cash flow—or leaning on gross rent multipliers without digging into expenses.
We get it—multifamily math can feel intimidating at first. But if you don’t know how to analyze a deal—or worse, you’re relying on a broker’s pro forma—you’re setting yourself up for failure.
Fix this first:
Learn to calculate Net Operating Income (NOI) and Debt Service Coverage Ratio (DSCR).
Understand how cap rates actually turn income into property value.
Know your break-even occupancy and how sensitive your deal is to rent drops or expense increases.
🧠 Quick example: A $50 rent increase on 100 units = $60,000 in new NOI each year. At a 6% cap rate, that’s $1M in added value. Every dollar matters.
2. You’ve Never Talked to a Broker
🚫 Rookie mistake: Waiting until you’re “ready” to start building broker relationships.
The truth? Brokers are the gatekeepers to deals. If they don’t know you, you won’t see the real opportunities.
Pro move:
Introduce yourself early—long before you plan to buy.
Share your target market, deal size, and ability to close.
Follow up consistently so they remember your name when the right deal comes up.
💼 The earlier you show up and start building those relationships, the faster you’ll move onto their A-list.
3. You Think Raising Capital Will Be Easy
🙄 Reality check: Nobody wires $100K just because you say, “I’m buying apartments.”
Capital raising is one of the biggest blind spots for new investors—and one of the fastest ways to lose credibility. If you’re scrambling to raise money after a deal is under contract, you’re already too late.
What to do instead:
Build your investor list before you ever find a deal.
Educate them consistently with emails, blogs, and calls.
Learn SEC rules and investor types before you accept a single dollar.
🔥 Pro tip: Investors back people before they back deals. Start building that trust now.
4. You Don’t Have a Team (or You’re Guessing Who You Need)
🚨 The problem: Trying to go solo—or partnering randomly because someone “seems cool.”
Multifamily is a team sport. Without clear roles, even solid deals fall apart.
Checklist:
Do you have a lender, broker, property manager, and experienced operators?
Who’s signing on the loan? Who’s analyzing the deal? Who’s handling investor relations?
Have you defined your own role in the GP structure?
📉 Don’t guess. Build your team with intention. Remember, this is a business -- build it wisely.
5. You’re Still Consuming Podcasts Instead of Taking Action
🎧 The sign: You’ve read or listened to 300 hours of content… but haven’t analyzed a single deal.
Education is great—but without execution, it’s procrastination.
How to shift gears:
Analyze 5 real deals this week.
Use real T12s, rent rolls, and OMs—not case studies.
Join a coaching or accountability group that pushes you to act.
📌 Remember: Podcasts don’t build portfolios. Action does.
6. You Don’t Understand Loan Terms or the Capital Stack
💳 Big risk: If terms like “recourse,” “preferred equity,” or “rate cap” confuse you, you’re not ready.
We’ve seen new investors crushed by floating-rate loans they didn’t fully grasp, or equity waterfalls that gave away more than they realized.
What to learn:
The difference between bridge, bank, and agency debt.
What “bad boy carve-outs” and “DSCR covenants” actually mean.
How a capital stack works—GP vs. LP, preferred returns, equity splits.
📘 If you can’t explain your capital stack to an investor in plain English, hit pause and study more.
7. You’re Not Comfortable Saying “No” to a Deal
💥 Dangerous mindset: Believing any deal is better than no deal.
We get it—your first deal feels huge. But rushing just to get one done can wreck your track record before it even begins.
💡 What to remember:
Walking away from a bad deal is strength, not weakness.
Your first deal sets the tone for your reputation. Make it count.
There will always be another opportunity. Desperation is expensive.
Final Thought
Every investor starts somewhere. But starting unprepared can derail your journey before it even begins.
Readiness isn’t perfection—it’s awareness. It’s knowing the numbers, building the team, and having the discipline to wait until the right deal matches your plan.
So ask yourself: Am I really ready to take the wheel—or do I need a few more reps before I drive?
⚠️ One Wrong Move Can Cost You Thousands
Get the accountability and expert guidance you need to buy apartments with confidence—and avoid expensive mistakes.
📥 Or grab our free download: The 7 Critical Steps to Buy Your First Apartment Building. Take the guesswork out of your first acquisition and start smart.