[XPOST] Help me evaluate this deal. CAP 5.0

[Ajaya A.]

In Oakland by Lake Merit(1 mile), would you do this?

MultiUnit

LTV: 55%

CAP: 5.0

COC: 4%

The huge downpayment is scaring me. Rent controlled property and most of the units are at or near 15% of market. So rental upside is not super huge.

Please be gentle. Light on investment knowledge here.

AJ

[Jared Rine]

@Ajaya A...Unless you're just buying to basically break even and write offs/depreciation/etc., no, this is not a good buy. A cap of 5% is not really upside - the property is performing at pretty much best capacity. With a 4% COC, that's so small return on your money.

What purchase price are we talking here?

What's your goal as an investor?  

If you have monies to consider this type of purchase, we should talk.  You definitely should be exploring other opportunities.

Hopefully that's not too brash. 

Thanks,

[Ajaya A.]

Originally posted by @Jared Rine:

@Ajaya A...Unless you're just buying to basically break even and write offs/depreciation/etc., no, this is not a good buy. A cap of 5% is not really upside - the property is performing at pretty much best capacity. With a 4% COC, that's so small return on your money.

What purchase price are we talking here?

What's your goal as an investor?  

If you have monies to consider this type of purchase, we should talk.  You definitely should be exploring other opportunities.

Hopefully that's not too brash. 

Thanks,

 Thank you.  Will do.