The 2% deal I walked away from

[Mike Krieg]

I'd love to know who would have taken this deal. 300k offering price for an 18 unit apt building where the gross potential rents were 6500/month. Unit mix is 14, 1 bedroom units leasing for $385/month and 4, 2 bedroom units leasing for 475/mo. 70 clicks away from my casa in Killeen TX. Would you have taken it? I had it under contract but chose to walk. I know I'm not providing enough data points to fully analyze the deal but on the surface of it the deal looks terrific.

[Brian Adams]

@Mike Krieg

@Greg H. has a lot of good advice!

I have a multi-family (fourplex) I manage myself as well as a SFH that I have a PM for, AND my brokerage has a property management wing that I observe. I wouldn't want a Killeen area rental that goes for less than $500. I'm also extremely particular to 3 bedroom units, though I suppose the expectation with apartments are different. There are just so many affordable 3 bedroom SFHs that 2 and especially 1 bedrooms have a hard time competing for quality tenants.

Add the high turnover for smaller units AND high turnover for an Army town, and it would take one skilled, loyal and well-compensated PM to make that work, I think.