Buying an Apartment Complex

[Account Closed]

Hey guys,

I am interested in buying an apartment complex. How do you determine which markets are good to invest in right now?

How do you find out about market cap rates across the states?

What would you do from a top down approach? State, to city, to zip code, to the actual apartment building.

[Bill Gulley]

Hi, Peter is absolutely right. A cap rate in the area? Do you mean that you want to invest based on the capiatlization rate of an area? First of all, such a rate is only applicable to the appraisal process and is not an indication of any specific rate for an individual investor. Your cap rate on any deal, regardless of where it is, is based on your financial position in the deal. Just because rental rates may be higher does not mean your profit or return will be greater. There are forum posts here on BP concerning cap rates and what they mean. Investing based soley on a cap rate is not a good startegy, IMO. Good luck, Bill