Just Venting, No Skin Off My Back!

[Priyanshu Adathakkar]

Acceptable CAP rate for multifamily properties in Ohio is as follow: Section 8 or any other subsidized housing is minimum 7.5%. For Market rate properties it is 8.5%. Student housing is minimum 6.5%. A good property that can be easily financed should have a Cash-on-Cash of 10%. Anything beyond these parameters is not a good deal, period!

Unfortunately what I am seeing is out of state buyers (my take: desperate out of state investors) are paying way too much for properties in Ohio driving up prices and bringing down CAP rates here. Biggest culprits? Investors from California! I just saw an investor from CA pay $215,500 for a property that in my opinion was not worth a penny over $60,000. The property was in C area with C construction and did not even come with appliances!!!! No kidding, but just enforces what I am trying to say.

Please, Please, Please speak with a good commercial agent before you put down your dollars. There are plenty of Residential Realtors here who are thrilled at catering to out of state clients and can earn big commissions! 

Just venting, it's your dollars, no skin off my back.