Buying a value add vs high performing

[Abraham Anderson]

I've been searching for about 6 months for a value-add multifamily property, 20+ units and around an 8% cap. However at the moment I have the opportunity to purchase an already high performing property. It's 20 units and will cashflow about $200/door/month. Occupancy is 100%, rents are already about market rate, and tenants are already paying their utilities, so I can't add value there.

In my mind, the good side is there's low maintenance, but the bad side is, I won't be able to force appreciation/cash out refinance in a few years (my original strategy). What are some other pros/cons?

[Joseph Gozlan]

@Abraham Anderson finding a value add deal that sells at a true 8% cap (actual not proforma) is very rare in a hot market like today. 

Usually MF owners will be sophisticated enough to know their property value and they market condition so they won't sell at a very low price. 

A good stabilized MF property is a cash cow. You put the down payment and money starts flowing. This is how you start your journey to financial freedom. 

I have never seen a property that has exhausted all possible appreciation forcing opportunities so even if it seems stable it might still have some "meat on the bone" to improve income or reduce expenses (e.g 100% occupied property usually means there is some room to increase rents).

Lastly, forcing appreciation might sounds like an awesome thing to do but it involves a lot of hard work, careful planning and being ready for the hiccups and surprises life throws at you.