What is a good Denver Multifamily Deal?

[Taylor Jacobs]

I’m on the acquisitions team for a local development company based here in Denver. My job is to find development projects, but I come across a lot of other off market real estate deals that our company doesn’t focus on, mostly apartment buildings. I don’t necessarily want to pass on these as I know there are buyers out there, but I don’t know how MF buyers are valuing these deals. Is it merely a cap rate? Can any buyers out there give me some criteria that I should be asking these Seller’s to know if it’s a deal worth doing or not?

[Tyler Gibson]

@Taylor Jacobs it is not just cap rates but that has a place in the analysis. The value of MF properties is all based on what they produce in terms of revenue. So if there is an opportunity to come in and add value (increase rent or reduce expenses) then it might be a good deal. When you can do both it is even better. You can literally force appreciation in a commercial MF property by reducing expenses and increasing rents.