Seeking Guidance: Prospective Purchase of Multifamily Property in St. Louis

[Krishna Surendra]

Hi,

I am currently exploring the potential purchase of a 12-unit apartment complex located in St. Louis. The property consists of ten 1-bedroom, 1-bathroom units, and two 2-bedroom, 1-bathroom units. Before proceeding, I am seeking your expertise to evaluate whether this investment opportunity aligns with sound financial considerations. Your insights on potential risks and pitfalls associated with this acquisition would be invaluable in guiding my decision-making process.

Thank you for your assistance.

https://www.biggerpockets.com/analysis/rentals/8cd3ed2b-b98d...

Thanks,

Krishna

[Joseph Bui]

Hi Krishna, according to your numbers the returns seem solid. However, something to consider is that in midwest markets, big multi family properties tend to attract lower quality tenants. In these markets, the quality of tenant is already lower to begin with, then you make it one step lower. The net outcome of a lower quality tenant ranges anywhere from nothing to catastrophic, but you probably understand where I'm going with this. Have you considered maybe 6 duplexes or a mix of duplexes and single family properties. I invest in other midwest markets (Memphis and Detroit) but I have purpose stayed away from multifamily just to lower my chance of a bad tenant.