Most accredited investors evaluate a multifamily deal using the wrong number.
They look at the return and stop there.
The problem is that multifamily syndications have two layers of return happening at the same time.
The first is cash flow.
You receive quarterly distributions from a professionally managed asset without handling tenants, maintenance, or operations yourself.
The second layer is where things get interesting.
Many multifamily deals use cost segregation and accelerated depreciation, which can create paper losses that may help shelter some of your investment income from taxes.
For high earners, that tax layer can significantly change the after-tax return profile.
Before investing, I use a simple 5-point framework:
1. Operator track record
2. Market selection
3. Debt structure
4. Private Placement Memorandum (PPM)
5. Alignment of interests
A great deal on paper can still be a bad investment if the team, market, or financing structure is weak.
The goal is not finding the highest projected return.
The goal is finding the right deal with the right operator.
Save this checklist for the next multifamily deal you evaluate.
