What is the FIRST Step in Buying Apartments?

Defining criteria
Published May 10, 2019
by Mark Kenney
There’s one inevitable realization all green apartment investors will face early on. I’m talking about the realization that one cannot predict the future and what an unfortunate handicap that is in the world of Multifamily Investing. It can be a career debilitating reality. All of a sudden, you’re exposed to a plethora of properties, none of which come with a flashing I’M THE RIGHT ONE sign. While I’m light-heartedly serving up this concept, PAY ATTENTION… because many investors before you have fallen prey to getting stuck before they start or, even worse, starting off with a bad deal. You can combat this epidemic by being prepared and defining your criteria.

In Multifamily Investing, “Defining Your Criteria” is the first essential step to consider before putting your money anywhere. To make the best and most profitable investment choices, you need to specify, outline and, I would suggest write down, a game plan to guide you through the storm of properties, information, details, and deals. Defining your criteria will save time, money, frustration, and as a new investor, will save you from the dreaded Analysis Paralysis – a condition described as a plaguing fear of failure, which prevents one from making that first move towards financial freedom.

I wish I had been more clear about what I was looking for as a young and hungry investor. All of that energy could have been directed at more productive and profitable tasks instead of analyzing deal, after deal, after deal. Knowing now that only a small percentage of available deals are even worth my consideration, defining my criteria should have been my very first priority. But, I feared missing out on that one awesome deal. So, I spent countless hours dissecting every prospective deal I came across, stuck in Analysis Paralysis, refusing to act. Take it from me, skipping the step of “Defining Your Criteria is counterproductive to every goal you have when it comes to real estate investing.


  1. Start defining your criteria by addressing the obvious:
    • What location(s) do you want to invest in?
    • How many units should a property have for it to make your list?
    • Which property class(es) will you consider?
    • At what purchase price(s) should a property be to attract your attention?
  2. Pepper in your deal-breakers:
    To help you consider YOUR deal-breakers, I’ll share some of mine:

    • Never pay cash for a deal. It could take forever to get your money out again when you could be investing it.
    • Be extremely selective on buying a property that has a lot of down units. Everything involved in flipping such units takes longer and costs more than anticipated.
    • No small properties. In my experience, the smaller properties have been the biggest time sucks and distractions from my bigger goals. The effort to purchase a small property is the same as purchasing a large property (with the exception of raising money for larger deals could take longer).
    • Render caution when considering properties in high crime areas. There’s much stress associated with these properties, not to mention, lenders don’t like high crime areas, which limits your financing options.
  3. Decide on an investment strategy:
    If you’re unclear on which strategy will serve you best, I recommend observing idol-worthy investors. Take note of what they do and WHY they do it.

    • Did they start off buying rehab deals and then move to more stabilized assets?
    • Did they begin investing in single family and progress to multifamily?
    • Did they start off holding deals for only a couple years and then move to long-term holds? 
    • Do they typically sell or refinance a property?

Answers to these questions will help you determine your investment strategy and further define your criteria. It’s a small task that will set you up for success. Good luck and remember, Think Multifamily is behind you!

About the Author

Mark Kenney
Mark Kenney is a seasoned real estate investor, entrepreneur and founder of Think Multifamily. Mark started his real estate career over 25 years ago and has extensive experience in property valuation, acquisition, and operations. He has a passion for helping others succeed in the multifamily arena.