How does small Multifamily work these days?

[Andrew Carlson]

Everything I come across doesn’t cash flow, or squeaks out a couple hundred bucks a month (which doesn’t even cover Cap-ex). Every broker I talk to says the same thing “yea that’s pretty typical these days.”

Everyone ALWAYS says “you make money when you buy” and “buy low sell high!”

Ok, so what is the end game here? Buy high, hope it goes higher? Hope interest rates are lower when the 5 year balloon payment comes due?

[Gino Barbaro]

@Andrew Carlson

It depends on the market you're in. The sellers who have to sell are starting to lower their prices to reflect the increase in cost of capital. It takes some time to exit this seller's market, and enter the buyer's phase. We are getting unsolicited seller financing on deals, which means that debt has started pulling back, which will lead to prices being reduced further.

You don't make money when you buy, you make money when you sell (exit --> refi or sale). You need to buy right, but the real money is made at the exit. The end game depends upon your investment and business strategy. We are of the mind of Buy Right & Sit Tight. We have sold deals that don't fit our criteria, or we found a better opportunity.

Brokers are starting to come around as well. They've got a tough job. Buyers hammer them for the lowest price, and sellers who got unsolicited offers 12 months ago now want that price. Good luck.

Keep putting in the reps and one will pop

Gino