Start with the Numbers, Not the Price

Every offer on an investment property should start from the income analysis, not the asking price. Run your NOI, cap rate, and cashflow projections. Determine what purchase price produces your target cap rate (typically 7%+ in today's environment). That number becomes your offer price anchor — not the listing price, not what your agent thinks it will sell for, not what the neighbours paid.

Conditions to Always Include on a Duplex

Home inspection condition (minimum 5 business days): critical for duplexes because you have two of almost everything — two electrical panels, two HVAC systems, two water heaters. Financing condition (5–7 business days): your lender needs to verify legal status of the second unit. Legal status verification: specifically ask in writing that the seller confirm and provide documentation that the second unit is legally permitted.

How to Negotiate From the Financials

The most powerful negotiating tool for investment property is the income analysis. If the listing doesn't support the asking price at your target cap rate, present the seller with your analysis. 'Based on current market rents and operating expenses, this property supports a cap rate of 4.2% at your asking price. To achieve a 7% cap rate — the minimum that justifies our purchase — we need to buy at $X.' Sellers who understand investment property will engage with this argument.

The Clause Most Investors Miss

Add a 'Rental Income Verification' clause requiring the seller to provide: current lease agreements for all units, rent receipts for the past 12 months, and confirmation in writing that no first/last month deposit disputes are outstanding. This protects you from discovering undisclosed tenant issues after closing.

Multiple Offers: When to Walk Away

In competitive situations, investors get emotional and overpay. Set your maximum price based on your target cap rate before you enter a multiple offer situation — and honour it. A deal that doesn't pencil out at $750,000 doesn't become better because three other buyers want it. If you can't win at a financially justified price, congratulate yourself on your discipline and move to the next deal.