MF property analysis

[Carlos Arjona]

Hello and hope you’re all having a great week!

I’ve been speaking to several experienced investors in the commercial MF space and for the most part when we talk about analyzing numbers on a property they always mention that they look for ways to disqualify a deal.

I was wondering what are the specific things you all look out for to disqualify a deal and move on to the next one.

[Todd Dexheimer]

What is your criteria? Be specific in your criteria, so you can move on from deals quickly. 

So if you are a value add investor, does it have value add that you like? Maybe that is raising rents by $200+/unit or implementing green initiatives or adding amenities. If adding amenities is your thing, then a 1960's product with no club house and no green space would disqualify the deal. 

Also age of property. Maybe you prefer properties that are vintage or historic. A 1990 built building would then not fit

Location - Do you want the deals all in the same areas to be able to package them for a sale or have management efficiencies? Do you want them spread out for diversification? 

Class of Location/property: A, B, C, D what's your preference? 

Occupancy: 90%+ or distressed? 

Financing type. Does it qualify for agency debt or will it eventually qualify?

Unit count: Getting sent a 600 unit building is cool, but even if its a good deal, can you close on it? 

Building type - flat roof vs pitched roof, vinyl siding vs brick, sub grade units vs above grade

Located in a flood zone or other environmental issues

Oh, there is so much more...