We just bought an 8-unit deal in southern NH, where the seller provided no organized financials.
No P&L statements. No tax returns. Just a handwritten rent roll on notebook paper and a seller who’d owned the property for 23 years.
Most sophisticated investors would have walked away immediately.
But we saw opportunity.
This situation perfectly illustrates the fundamental difference between pursuing small multifamily deals (5-20 units) from mom-and-pop sellers versus larger acquisitions from experienced operators.
Here’s what we’ve learned after dozens of these transactions:
When you’re buying smaller deals from less sophisticated owners, you’re entering a completely different environment.
These sellers typically don’t maintain vetted financials, surveys, environmental reports, or estoppel certificates. Many don’t even understand why you’d request such documents.
The cooperation level is dramatically different too… especially without a broker facilitating the transaction.
The key insight? You must become comfortable making decisions with imperfect information.
This is precisely why smaller deals offer superior return potential. While institutional buyers require comprehensive documentation to work through due diligence, you’re competing in a space where incomplete information is the norm, not the exception.
Our risk mitigation strategy involves three critical elements:
- First, we buy with significant margin of safety in our pricing. When information is limited, conservative assumptions become your insurance policy.
- Second, we maximize physical due diligence. What the books can’t tell you, the property condition and tenant conversations will.
- Third, we leverage deep market knowledge to underwrite our own numbers rather than relying on seller-provided financials that may not exist anyway.
The portfolio advantage cannot be overstated. Rather than concentrating risk in one large asset, we spread exposure across multiple smaller properties. This approach actually reduces overall portfolio risk while maintaining access to the premium returns available in the mom-and-pop seller market.
For passive investors, this creates a clear strategic consideration: seek opportunities within larger portfolios of smaller properties or fund vehicles that aggregate these deals. You capture the outsized returns of working with less sophisticated sellers while benefiting from diversification across multiple assets.
The property I mentioned at the beginning of the email?
We closed in 45 days at 25%+ below market value (paid $824k, as-is appraisal of $1.1M) because we could move quickly and didn’t burden the seller with excessive documentation requests. Sometimes the best deals are the ones where you don’t have all the information.
The question isn’t whether you can find perfect information… It’s whether you can make profitable decisions without it.