Increasing value of Multifamily Properties

[Oladimeji Sonibare]

Hey, All.

I'm looking to purchase a mid-sized multifamily property with a partner. He's providing the bulk of the funding; I'm analyzing the deal. Where I'm stuck is figuring out how to add value. I understand that MF's are priced according to their NOI. What are some creative ways to increase cash flow/reduce expenses, in your experience?

Sb: These properties already come with washer/dryer sets and if you know of a way to find MF deals for LESS, you’re also welcome to respond.


Thanks a lot!

[Taylor L.]

There are two knobs you can turn, income and expenses. Increasing income, decreasing expenses.

I prefer to target increasing income, because expenses can only be reduced so far until you start skipping critical maintenance and generally skimping out. We will typically update the kitchen, floors, and generally improve the exterior to target increased rents. Look at comparable properties in the market to determine what the potential rents are.