10 Unit Multi Family Demographics

[Tj Hines]

I know that  job growth as well as population growth in markets when looking to acquire 50-200 units are definitely some key measures that we need to take into account. But when looking to acquire maybe 8-20 units in much smaller markets does the population have to be an astonishing number such as 200K? If so I guess okay then, but if not what would be a good population to base your research on?

[Steve Vaughan]

@Tj Hines- I have a 10 unit mixed-use in a rural town of 1200.  I also have a 7 and a house or 2 there.  I have had my slower times when finding good tenants was hard and turnover was often, especially for the retail store space.  But my break-even was 6 units and at the time the vacancy rate was about 20% and I bought both multi's at a 14 cap.  The market cap now is 7.5 and vacancy rate down to about 3%. Economic.

What's helped a lot is the distance from a 'metro' area.  This is 30 mins in between 2 destination towns.  I get a lot of overflow from the 2 much more expensive housing areas seeking value.  Is your smaller town near a more expensive one?  

So - if it's priced right (just above market cap) and there are value-seeking tenants around, I have had good experience being a large fish in a small pond.  Good luck!