Market CAP Rate - Gastonia, NC

[Josh Stack]

Morning,

Does anyone have any experience with the prevailing CAP rate for small multifamily in Gastonia? I've done a bit of googling and not found much. There are three properties for sale on LoopNet and it seems like for a small complex/apartments the CAP rate is about 8%.

Is this in line with your experience?

[Chris Martin]

Originally posted by @Josh Stack:

Morning,

Does anyone have any experience with the prevailing CAP rate for small multifamily in Gastonia? I've done a bit of googling and not found much. There are three properties for sale on LoopNet and it seems like for a small complex/apartments the CAP rate is about 8%.

Is this in line with your experience?

The real question is can you believe the loopnet broker's numbers? For 1950s houses in the one package, I have a hard time believing total expenses are 35% of rents. On the 6+3 property, take a look at what the seller bought for on 8/10/16. Parcels 103344 & 103342. That's closer to where it should be priced IMO... or rather, that's closer to where I would be interested. Brokers are going to price it as high as they think it will sell for.

Look at google street view... second unit, with the sheriff eviction notice and the trashed miniblinds. New door on fourth unit... always makes me wonder what shape the last one was in (meaning it was probably kicked in/destroyed). Window A/C (no central air). Needs siding on the 3 plex, visible deferred maintenance, etc. This looks like a small challenge both from a numbers standpoint and a PM standpoint. 

Good luck in your search.