What do you think of this SeaTac MFH?

[David S.]

I am thinking of investing in a syndication that is buying a 157 unit apartment project located at 3117 S 192nd St. in SeaTac, WA 98188.

It appears the property last sold in 2015 for $1.8Mn….the syndicators now plan to buy this property at a price that is about 60% higher and around 10.8X trailing 12 months gross rental income or 9.7X gross income projected over the next 12 months.

They plan to renovate the units and increase gross rental income by 11-13% in each of the next two years and then level off at 3% annual rental growth thereafter. There does not appear to be room for reduction in operating expenses.

I am doing my own due diligence but would also like feedback from others in the local area as to what they think of the location, the property and prospects continued growth in the area and for increasing rents. Do you think the local market can support $1100 for a studio, $1500 for one bedroom, and $1775 for 2 bedroom units?

Also, what would be a reasonable expense ratio (operating expenses/total revenue) and cap rate be?

Thanks in advance for your input.