When Apartments Are at a Premium...

[Matthew Paul]

So I'm new to the site here but have really enjoyed reading everyones thoughts and willingness to share experiences and opinions.

I have been pondering this one for a bit now. We are sitting on a pile of cash that we need to put into play that we want to put into multi-family units in Salt Lake City, UT. I am 100% over the equity markets and we like multi-family more than single-family for a variety of reasons. I moved out here full-time to get this ball rolling so now I need to get going. My only concern is that prices here are at an all-time premium, between low vacancies, high rents and low cap rates. I assume cap rates will be heading higher in the coming years, as they eventually have to with interest rates going, at least, a little bit up. I am convinced on the market and we are buy and hold investors but still need a decent cash flow and ROI.

My question to you guys is, "Is it sometimes ok to buy high if you know you are buying in a good location and expect to hold onto the property for at least 10 years?" If we can add some value to the property that would be a plus but I'm looking at a pretty slim inventory and priced accordingly. I appreciate anyones feedback on this issue.

Thanks,

Matt