Apartment price per unit

[John G.]

Hi all!

I've been investing in the small multi-family class C properties for 13yrs.  I am moving towards class B larger Apartments 20+ units.  Currently looking at 22 unit (4 buildings with garages) all built in late 90s and kept up to date.  As numbers go, it brings in $840/unit (2bd1ba W garage) Rents can be increased to 950-1000/month.  I guess my question is with these larger newer buildings...what are you guys seeing as a price/unit.  These ones are being priced at 100k/ unit.  Like I say, I'm used to buying the old class C stuff but not as familiar with the newer Class B stuff.  Thanks in advance for your opinions.

[Alecia Loveless]

@John G. In my area of northern New England there’s maybe only 5% at best of A class and the only real difference between B and C class is the level of renovation on the inside of the property. Since we’re not by any large city we’re seeing between $65-80K per unit depending on specific location, condition of the building and intelligence of the seller. Some are just listing assuming someone dumb enough to pay any price will come along and the property sits for months and eventually an out of the area buyer does come and buy it and others price so there is enough for an investor to get a small but decent return and it sells instantly.

Our D class properties are not all necessarily that bad but might be more so just run by slum lords who accept tenants with problematic backgrounds who can’t rent anywhere else and then raise their rents super high and don’t address problems or maybe don’t provide enough heat but the tenants can’t complain because they’ll end up homeless otherwise. They’re not just defined by neighborhoods they could be in the middle of good places and look normal.