Denise Piazza likes numbers. “My husband and I are both CPAs,” she told Michael Duncan of the Road to Financial Freedom Podcast, “and so that pretty much means our kids have no chance of being cool whatsoever.”

As such, she doesn’t just stop at the growing numbers of units under management at her investment firm, One Street Capital. Nor does she stop at the dollar value of her own personal portfolio. 

She also likes numbers like “50.” As in, “50 Questions to Ask Before Investing in Real Estate,” her recent contribution to the CamaPlan blog.

And numbers like “3.” As in her “3 Pillars of Real Estate Investing.”

We’ll get to that. As for the 50 questions, she learned to ask these questions the hard way.

“We began investing over ten years ago,” Piazza said. “Along the road we had a lot of great experiences and then some not-so-great experiences.” 

“So I wrote the article from the perspective of things I wish I would’ve asked along in my earlier years of passively investing … with the intent to help people do a better job of due diligence before placing their hard-earned money into any sort of investment.”

What to Ask Before You Invest

So what are some of the fifty questions? Piazza was happy to spoil just a few of the top ones.

“I’d say, ‘Why did you select that market?’” she said. “What do you like about that particular market and attracts you to making an investment there?”

“I’d also ask about some of the key assumptions associated with that real estate deal … What’s the debt structure look like? What does the return structure look like? Is there a preferred return? Meaning … do the limited partners or passive investors get paid a certain amount before the sponsor to the deal makes any money?”

“I’d also ask a lot about the team,” Piazza said. “I think that’s an area that also gets overlooked. My main criteria for the team would be ‘What’s your background?’ You know, do they have a successful business background? How many partners are involved? Are they personally investing in the deal themselves?” 

“And then lastly, what’s their track record in this area and this particular aspect of real estate investing, so you can feel comfortable that you’re placing your hard-earned dollars in with the right team.”

The 3 Pillars of Real Estate Investing

These top questions align perfectly with Piazza’s aforementioned “three pillars” — 1. The market, 2. The deal, and 3. The team.

For the market, she’s looking for landlord-friendliness, population growth, wage growth, and an often-overlooked characteristic — diversification of industry. If a town is dependent on one industry, a decline in that industry could leave everyone out of a job and unable to pay their rent. 

One thing Piazza has learned over the years about market diversification is that cities can surprise you. 

“One of my investments is in Houston, Texas,” she said. “And when people first think about the city of Houston, they assume that it’s all oil-and-gas driven.”

Using tools like and Neighborhood Scout, however, Piazza was able to verify that the oil-and-gas industry actually accounts for less than 25% of the jobs in Houston — well within her target for industry diversification.

As far as Pillar #2 goes — the deal itself — Piazza looks for assumptions that aren’t too aggressive. In her experience, aggressive assumptions render the ROI projections meaningless.

Recently, a big arena for aggressive assumptions has been loan-to-value ratios. 

“Right now, with where interest rates are, we’ve seen the loan to value on properties and investments that we’ve put our funds into at a smaller proportion,” she said. 

Whereas before she would have considered maximum leverage — 80% loan-to-value or more — now she expects to see loan-to-value ratios of 60-65%.

As far as the team goes, Piazza expects the changing market conditions to weed out the seal sponsors who have heretofore been able to coast on luck.

“With all the compression of the cap rates … and the incredibly high valuations that have been out there in the real estate world,” she said, “it’s been easy for someone to be able to make money on these investments without having to do too much.”

Tax Heaven

As a CPA, Piazza has a soft spot for investments that give her and her investors an edge at tax time.

“What I look for is something with depreciation,” she said. “Depreciation is single-handedly, in my mind, the strongest tax advantage … As an investor, I’m earning cash returns for properties. But the tax is actually deferred on that associated cash because of the fact that I invest in assets that depreciate.”

Listen to the full podcast with Denise Piazza