New to Multi-Family investments. What to look at?

[Eric Tonnemacher]

Hello, I'm currently looking at multi-family investments in my area and as a new investor and I'm caught up a little on the analysis side of things. I would love to hear some suggestions and what other MF investors focus on when evaluating deals.  I realize it's probably a combination of things and everyone is different, but how much weight would you put into Cap Rate, Rent to Value, Cash on Cash Return etc etc? 

Should the simple focus be on cash flow? 

[Theo Hicks]

The two main factors in apartment investing are cash-on-cash return and internal rate of return (IRR).

Cash-on-cash return will show you the proportion of cash flow to equity investment, and IRR does the same thing but it account for the time value of money (i.e. $100 today is worth more than $100 in one year).

If you are raising money and doing an apartment syndication, the cash-on-cash return and the IRR to the passive investors takes the priority.