For advanced readers

Reading a deal end to end

Take a listing and work it in order: verify the rent against comparable units, rebuild the expenses from tax records and real insurance quotes rather than the seller's sheet, deduct a vacancy allowance and a repair reserve, and arrive at your own net operating income. Divide that by the asking price for a cap rate, then layer in the loan you can actually obtain to find cash flow and debt coverage. Only now estimate the tax picture: how much of the price is building rather than land, what annual depreciation that implies, and whether the paper loss is usable to you this year. A deal that survives all six steps is worth an offer — and everything the later installments teach is about making the final step larger.