3 Steps To Making an Offer on Your First Multifamily Deal

Discover how to confidently assess properties, review contracts, and submit offers on your first multifamily deal using this proven 3-step framework.

• Step 1: Assess the Deal (location, cash flow, pricing)
• Step 2: Review the Contract (timelines, contingencies, legal safeguards)
• Step 3: Submit the Offer (negotiation strategy, take-price discipline)

Whether you’re just starting out or looking to refine your process, this guide will help you move forward with confidence.

3-Step Framework for Making Your First Multifamily Offer

I vividly remember the first time I made an offer on a multifamily property. My hands were literally shaking as I signed the contract. Doubts and fears raced through my mind, but I pushed forward—and that single decision transformed my financial future. It marked the beginning of my journey toward financial independence. In this training, I’ll walk you through the same three-step framework I’ve used for over 25 years to evaluate and submit offers on multifamily deals.

Step #1: Assess the Deal

Before making an offer, you must determine whether the property is a sound investment. This step is foundational and it’s all about assessing the deal—digging into the location, the numbers, and the price to make sure the property is worth pursuing. I recommend approaching this with a data-driven mindset. By focusing on numbers, you eliminate guesswork, remove emotion and avoid overpaying. Here are the three components of assessing a deal:

A. Location, Location, Location

It’s a foundational principle in real estate and it still holds true. You can renovate a distressed property, but you cannot fix a poor location. Focus on neighborhoods with strong fundamentals—low crime, stable tenant demand, and economic growth. Avoid high crime areas plagued by vacancies, drug activity, and unreliable tenants.

B. Cash Flow

To ensure your investment is sustainable, it must be cashflow positive from day one. That means your income must exceed your expenses, including mortgage payments. Before submitting an offer, run your numbers thoroughly—income, expenses, and debt service. I’ve created a detailed video titled Cashflow Master Class for Multifamily Investing, which serves as a masterclass on this topic.

C. Pricing

Your offer should be based on two key metrics:

1. The seller’s asking price
2. Sales comparables (comps) from the past 12 months in the same area

If the asking price is aligned with comps—for example, $1,000,000 with comps ranging from $975,000 to $1,025,000—start your offer at approximately 6% below the asking price. This provides room for negotiation and reflects standard industry practice.

However, if the asking price significantly exceeds comps—say, $1,000,000 versus $800,000 in comps—submit your offer at the comp average. Do not allow let emotion drive your decision. The property may look beautiful and be in a great location, but you must fall in love with the numbers, not the property. Remember, the market, not the seller, determines value. If the property is overpriced, make your offer based on the comps and be prepared for a counteroffer.

Establish Your Take Price

Your take price is the maximum amount you’re willing to pay while still meeting your investment criteria. It should be based on comps (maybe slightly higher) and ensure the deal remains cashflow positive. Establish this number before negotiations begin and if the seller won’t meet your there, walk away.

Step #2: Review the Contract

Once you’ve confirmed the deal makes financial sense, it’s time to turn your attention to the paperwork. The next step is to carefully review the contract. This document is legally binding, and it must protect your interests from day one. When you sign it, you’re obligated to adhere to everything written within it. That’s why it’s essential to understand what must be included before you commit. There are two major areas to focus on during contract review: critical timelines and key contingencies.

A. Critical Timelines

Your contract should include sufficient time for due diligence—time to inspect the property, secure financing, and confirm the deal aligns with your goals. I recommend the following structure:

• Inspection Period: Minimum 30 days. Your contract must include an inspection clause that gives you at least 30 days to complete a thorough property inspection. This allows time to conduct a thorough property inspection, including roof, foundation, HVAC, and all units. Bring in professional inspectors and expect a detailed report—often 20 to 50 pages long. I’ve created a comprehensive video titled How to Inspect an Apartment Building—it’s extensive and worth your time.
• Financing Period: Minimum 30 days. Your contract should also include a financing clause that gives you 30 days to secure a loan. Commercial financing takes longer than residential loans. You’ll need time to shop lenders, compare terms, and get approvals.
• Closing Period: 30 days after inspection. Finally, your contract should state that closing will occur 30 days after the inspection period ends. This results in a total timeline of approximately 60 days —30 for inspections and 30 for closing.

B. Key Contingencies

Contingencies are safeguards that protect your earnest money deposit. They allow you to back out of the deal and recover your earnest money deposit if certain conditions aren’t met. Without them, you risk losing thousands of dollars if the deal falls apart. Include the following three clauses:

1. Inspection Contingency Clause: Allows you to cancel the contract if the property fails inspection and gives you the freedom to move on if the deal doesn’t meet your standards.
2. Financing Contingency Clause: Gives you time to secure financing. If you can’t find a loan that works for you, the contingency allows you to exit the deal without penalty.
3. Title Contingency Clause: Protects you if the title report reveals liens, unpaid taxes, or legal issues. If the title isn’t clean—say the seller hasn’t paid property taxes for three years—you need the ability to walk away. A clouded title makes the property unmarketable and, in many cases, nearly worthless.

Make sure all these elements—timelines and contingencies—are clearly written into your contract. If they’re missing, don’t do the deal. They are non-negotiable.

Step #3: Submit the Offer

This is the exciting part. You’ve done your due diligence and reviewed the contract. Now it’s time to take action and make an offer. However, many aspiring investors hesitate at this stage. In my experience, three common barriers prevent people from submitting offers:

A. Analysis Paralysis

Overthinking can stall progress. There is no such thing as a perfect deal. The solution is to ensure your contract includes the right contingencies—exit clauses so if something doesn’t feel right post-offer, you can walk away. Every deal you evaluate, even if you don’t close, sharpens your skills for the next opportunity.

B. Fear of Rejection

Rejection is inevitable in real estate. Not every offer will be accepted, and that’s okay. Develop resilience and understand that each “no” brings you closer to a “yes.”

C. Lack of Support

Many investors try to navigate the process alone. But as Proverbs says, “Where there is no counsel, the people fall; but in the multitude of counselors, there is safety.” Surround yourself with experienced mentors who can guide you through the process. If you need help, we are here to support you every step of the way.

Navigating the Counteroffer

Once your offer is submitted, expect a counter. If you offered $1,000,000, the seller may respond with $1.1 million. This is standard practice. It’s rare for your first offer to be accepted outright. This is where your take price comes into play—the maximum amount you’re willing to pay while still meeting your investment criteria. Counter with that number. This keeps you grounded and prevents emotional decision-making. If the seller accepts, congratulations—you’re under contract.

What If They Don’t Accept?

If they reject your counter and insist on a higher price, walk away. Just like negotiating a car purchase, walking away maintains your leverage. They may come back. They may not. Either way, stay disciplined and unemotional.

Your First Offer Framework

You now have a clear, actionable framework for making your first multifamily offer:

• Assess the Deal — Focus on location, cash flow, and pricing.
• Review the Contract — Lock in critical timelines and non-negotiable contingencies.
• Submit the Offer — Push past fear, stick to your take price, and maintain your power.

Every Successful Multifamily Investor Has a Mentor

If you’re serious about investing in multifamily real estate—we offer hands-on mentorship designed to walk you through every phase of the process. From deal analysis and contract review to offer strategy and negotiation, I’ll help you avoid costly mistakes and move forward with clarity. Get your mentor here:  Commercial Property Advisors Protege Program

If you have any comments or questions, text PETER to 833-942-4516.