Once I have found a property that passed the investment criteria, I then start the detailed underwriting process. There are two main strategies that I use in the multi family apartment investing space.
Yield Play
The yield play is an apartment investing strategy that produces high cash on cash yields for investors. The strategy is great for large stabilized properties that are renovated and modernized. This strategy basically performs like a pension fund paying out high cash on cash returns. This play is great for pure cash flowing passive income.
Value Play
The value play is my preferred strategy. This strategy is a hybrid which combines yield as well as capital appreciation. Not only does it provide high cash flow yields, but I force appreciation and cash out with a large gain at the end. Thus investors grow capital at the same time as earning passive income. A perfect play.
This strategy is the one most commonly used and is great for properties with below market rents and properties in need of better management and renovations.
Both produce great passive returns and cash flow.