How to read a multifamily deal
An apartment building is a stack of leases held up by shared systems. Start with what each unit collects, then budget the people, the building, the utilities, and the loan behind it. More units buy scale, not cheaper doors.
Build income from the unit mix
Break the rent roll apart: unit types, what's occupied, the rents paid today, concessions, and who's behind. Parking, laundry, and storage count too, with what they cost to run.
A rent roll is a list of what's owed. Lay it beside the operating statements and the deposits; where they disagree, you've found your first question for the seller.
Pin down what "expenses" means here
Where the records exist, use the real lines: taxes, insurance, management, payroll, utilities, repairs, and anything else that repeats. The expense-ratio toggle is a screening shortcut, fine for a first pass and no substitute for a real budget. Keep replacement reserves and year-one capital work visible, and check nothing got deducted twice.
Read the ratios and the annual cash flow
Cap rate sets annual NOI against price. DSCR sets that same NOI against a year of loan payments, though your lender runs its own adjustments. Cash flow here is the building's annual result after the modeled debt, and cash-on-cash rides on the cash you entered. Reserves, income taxes, and post-closing work sit outside all of it.
Price per unit and gross rent multiplier only compare buildings that match on units, income period, condition, and what's in the sale. A cheap price per apartment is often a roof and a boiler waiting for you. Run a softer-collections version, confirm the loan's maturity, guarantees, and reserves, and you'll know the deal's floor as well as its upside. The reserve calculator helps you size the replacement work.
Two inputs deserve a phone call before you offer: collections and the insurance quote. Make both and the rest of this model holds up.