How much stock do you put into price per door?? Midwest

[Stephen Jones]

BP,

I am an investor in the midwest area (Illinois). Most of my purchases have been anywhere between 50-65K per unit. I currently have a 6 unit deal on the table but the price per door is 98k. Granted, these are very nice townhomes with outstanding rents in an outstanding area. It isn't a cash flow beast at these numbers, but it's definitely cash flow positive. It is a newer asset, built in 2004. I do see it appreciating tremendously in the future. Long story short, I am a little uneasy paying the premium per door. Any feedback would be appreciated! Thanks.

[Taylor L.]

I like it as a sanity check and an indication of where the property may stand in the market, but I do not see it as a decent gauge of future value or cash flows. There are much better ways to figure that out.