Running Numbers on Intended Owner Occupant Multifamilies

[Ryan Cook]

Quick question - I'm a broker and work with a lot of folks looking to purchase a multifamily for occupancy. I still run numbers as if they weren't in the property to see if the numbers make any sense and if a property is worth further investigation (i.e. a site visit).

I was having a conversation with another broker who owns 10 multis and he told me the numbers aren't important for owner occupants... and that by the time they may sell, the rents will have gone up, the equity will have increased, etc. 

Sounds wrong to me... and I have a good track record with my clients... but the question is, "Should basic numbers be adjusted on multis for intended owner occupants?" I stick to $200/door/mo, >= 6% CAP, >= 10% CCR, >= 1.25 DCR, > 1% Rule.

[Heath Ryans]

@Ryan Cook man i think your spot on. I would say always run numbers as if they weren't living there. Why would you want to set them up for potential failure when (not if) they decide to move out? As far as specific numbers, i don't know your market like you do. But if you have found something that works and makes sense for you and your clients, absolutely stick with it. If you bank on appreciation and rent growth to save you, i think your making a risky bet. That's not something i would appreciate my broker doing. I would want someone to point it out if i'm making a poor decision. Keep doing what your doing and i doubt anyones going to be kicking your door down any time soon.