Would I Put My Own Money Into This Deal? What Multifamily Investors Should Ask Before Investing
- teresa90643
- 2 days ago
- 6 min read
By: Laura DeVaney | Co-Founder | Next Legacy Group
The Question I Ask Before Investing in Any Deal
Recently, our team at Next Legacy Group reached an important milestone: we closed on a multifamily property.
Reaching the closing table is exciting. The underwriting has been reviewed, inspections are complete, financing has been negotiated and the documents are signed.
But the path to closing is rarely perfectly straight.
There are unexpected issues, difficult conversations, changing assumptions and moments when you have to stop and reassess.
That process reinforced something I strongly believe about multifamily real estate investing.
When an opportunity comes across my desk, I don't want my first question to be:
"What is the projected return?"
Returns matter. We're investing to make money.
But there's a more important question:
"Would I put my own money into this deal?"
And perhaps an even better question:
"Would I feel comfortable putting my family's money into it?"
That question changes how you evaluate an investment opportunity.
Investors Often See the Beginning and the End
As an investor, you may see an opportunity when it's presented.
Later, you hear:
"We closed."
What you don't always see is everything that happens in between.
That includes:
Underwriting revisions
Lender conversations
Property-management discussions
Inspections
Due diligence
Challenging assumptions
Unexpected issues
Decisions about whether to move forward or walk away
Buying a multifamily property isn't simply about finding a building with attractive numbers.
It's about determining whether those numbers can hold up under real-world conditions.
A Spreadsheet Is Only the Beginning
At Next Legacy Group, we spend significant time analyzing potential investments.
We look at:
Occupancy
Rental income
Operating expenses
Debt service
Capital expenditures
Break-even points
Multiple potential scenarios
But a spreadsheet has limitations.
A spreadsheet tells you what should happen.
Due diligence helps reveal what might actually happen.
During our recent acquisition, we discovered that many residents had pets that weren't reflected in their rental agreements.
That seemingly small detail revealed more than one opportunity.
It helped identify potential additional property revenue through properly documented pet fees.
It also helped us better understand the people living at the property. An underused basketball court, combined with the needs of residents, created an opportunity to consider whether the space could better serve the community as a dog park.
That's what good due diligence can uncover.
Sometimes the same information that reveals a potential revenue opportunity can also reveal an opportunity to improve the property for residents.
Ask the Hard Questions Before You Invest
Underwriting shouldn't stop when the model looks attractive.
That's when the questions should get harder.
What happens if:
Occupancy falls?
Expenses increase?
Renovations cost more than expected?
Rent growth is weaker than projected?
Insurance or property taxes increase?
The market changes?
The exit environment looks different several years from now?
One of the most valuable questions we can ask is
"What if we're wrong?"
Not because we expect the plan to fail.
Because we want to understand how the investment performs when the plan is tested.
Know Where the Deal Breaks
One of the areas I have become increasingly interested in is something that doesn't always receive enough attention in an investment presentation:
The break-even point.
I don't only want to know how a property performs at 95% occupancy.
I want to know what happens at:
90%
85%
80%
At what point does the property stop comfortably supporting itself?
That tells me something a projected return alone cannot:
How much margin for error do we have?
Real estate rarely follows a spreadsheet perfectly.
Interest rates move.
Insurance premiums increase.
Taxes change.
Repairs happen.
Residents move.
Markets shift.
As investors, we need to understand not only how an investment performs when everything goes according to plan, but also how it behaves when it doesn't.
The Property Is Only Part of the Investment
A good property alone doesn't create a good investment.
Someone has to execute the plan.
Someone has to:
Collect rent
Control expenses
Oversee maintenance
Manage renovations
Monitor occupancy
Identify problems
Recognize opportunities
Adjust when conditions change
That's one reason being vertically integrated matters to us.
At Next Legacy Group, our approach includes in-house property management, construction and maintenance teams.
This provides greater visibility into what's happening at the property and more direct control over how the business plan is executed.
But for me, the bigger advantage is alignment.
The people making decisions about the investment are closely connected to the people managing the property, completing the work, interacting with residents and seeing what is happening day to day.
That matters because a business plan written before closing will never anticipate everything that happens afterward.
When occupancy changes, an expense comes in differently than expected or we identify an opportunity to improve the property, our teams can communicate directly and adjust.
That's why I believe the team operating the property matters just as much as the property itself.
Ask Yourself: Do I Trust the Team?
For me, the question isn't simply:
"Do I believe in this business plan?"
It's also
"Do I trust the team responsible for executing it?"
Because eventually, something unexpected will happen.
And when it does, I want the people responsible for the investment and the people operating the property working toward the same goal.
Closing Is Only the Beginning
Before closing, the central question is,
"Should we buy this property?"
After closing, it becomes,
"How do we make this property perform?"
That shift matters.
The building doesn't know what the spreadsheet says.
Residents don't know what the business plan says.
The property simply operates every day.
Now the job is execution.
That means working with our property management, construction and maintenance teams, watching expenses, understanding resident needs, evaluating improvements and continually measuring actual performance against the plan.
Buying the property gets the announcement. Operating it well creates the outcome.
Investor Capital Makes It Personal
At Next Legacy Group, we're entrusted with capital that may represent years — sometimes decades — of someone's work.
That money may have come from:
Building a business
Growing a career
Selling a property
Making disciplined financial decisions year after year
I don't take that responsibility lightly.
When someone chooses to invest alongside you, they're placing trust in your team.
We can't eliminate investment risk.
No one can.
What we can do is:
Ask better questions
Challenge assumptions
Stress-test the numbers
Conduct thorough due diligence
Surround ourselves with experienced professionals
Be willing to say no when an opportunity no longer meets our standards
Sometimes the best investment decision is the deal you choose not to do.
The Small Decisions Matter
There is a verse in Alma that has always resonated with me:
"By small and simple things are great things brought to pass."
The more I build this business, the more I understand that principle.
A closing may look like one big accomplishment.
But it isn't.
It's hundreds of small decisions that eventually create one meaningful result:
One more question
One more phone call
One more document reviewed
One assumption challenged
One expense investigated
One difficult conversation
One decision not to accept the easy answer
Individually, those actions may seem small.
Together, they become something much bigger.
More Than a Closing
Reaching the closing table was an important milestone.
But the greater satisfaction comes from knowing how we got there.
We asked hard questions.
We challenged the numbers.
We worked through the unexpected.
And we kept returning to the standard I carry into every opportunity:
"Would I put my own money into this deal?"
When investors choose to invest alongside Next Legacy Group, they're trusting us with something they worked hard to build.
I want to honor that trust—not only in the investments we choose, but in how we operate them after closing.
That's what building Next Legacy Group means to me:
Making good decisions, over and over again, with people we trust and for people who trust us.
This closing is one milestone—and the beginning of the next chapter we're building together.
Want to Learn More About Multifamily Investing?
If you're exploring multifamily real estate investing, continue building your knowledge before making an investment decision.
Join Next Legacy Group's Friday Night Lights, a free weekly educational webinar where investors and prospective investors can learn more about multifamily investing, market trends, investment strategies and real-world deal analysis.
The webinar is currently held every Friday at 7:00 PM ET.
LEARN MORE ABOUT MULTIFAMILY INVESTING → https://funnel.nextlegacy.net/home
REGISTER FOR FRIDAY NIGHT LIGHTS → https://timeformorezoom.com/
About Laura DeVaney
Laura DeVaney is the co-founder of Next Legacy Group and a multifamily real estate investor. Her investment philosophy centers on thoughtful decision-making, due diligence, legacy and responsible stewardship of investor capital.
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