Military bases buy-and-hold strategy

[Kyle D.]

I am doing some research on buying SFRs/2-4 plexes near military bases and listing on military websites.  Here is kind of the baseline for what I would like to capture.  Is this too much, and is there anything I am missing, and can anyone suggest locations across the country that fit this bill? Not opposed to buying in PR, Guam, HI, etc...

-Within 15 minute commute of a military base that are large enough to not be shut down

-Preferrably in a known/recognized community the military folks lived last year, and the year before, etc  (eg. MacDill AFB in Tampa = South Tampa hotspot to buy in - but low cap rate)

-Neighborhood should be 50% rentals or less?

-Class "A"

-Rating on greatschools.org 9 or 10

-Cap Rate at least 8%

-Must have several other large employers in town with strong transient (consultant?) workforce

Any advice is appreciated.  PM me if you offer such services in your local market.

Thanks!

[Account Closed]

Originally posted by @Kyle D.:

 Sales comparison approach is the best indicator of value for residential AND commercial property. The problem with using this for commercial properties is that identical properties can have vastly different incomes (NOI) because they are generally encumbered with long term leases that can be at/above/below current market rents.

Too many newbies want to ue cap rates because they think it makes them look "professional" when the opposite is true or they are trying to scam other newbies trying to make them think they an compare a 12 cap with a CD rate.  Shame on them.

Now if you have smaller multi families that are no so physically comparable you can use a GRM gross rent multiplier. Basically if a similar buildings sell at 9-10 times rents you can probably figure your similar building will be worth the same. Here you have to be careful that the expenses would also be similar.

1.  Sales comparison best if you have comps.

2. Cap rate is ONLY useful if you have actual NOI information from cap rate comparables.

3. GRM's are good for similar properties that also would have similar expenses.