Where and how to look for larger commercial apartment buildings?

Question

we are thinking to acquire a 30 or 50 units apartments in the near future, but every where is expensive and does not make sense, is Sacramento or Stockton having those with good cash flow? I don't want to go further than 2 hours from the Bay area.

Michael Kovac · Answer

Thanks for posting @Larry L.

The truth here is that a lot of commercial deals of that magnitude that you are speaking of do not hit the open market. Commercial brokers such as myself have a network of buyers lined up ready to pounce when smart sellers put the feelers out. Your best move would be to extend your list of needs to as may commercial brokers as possible in the market you are pursuing, tell them why you are a good buyer and let the deals come to you.

Furthermore the "everywhere is expensive" and the "deals don't make sense" is something you will find in the bay area as it is a heavy appreciation market. Look for value add, development opportunities, up and coming markets and undervalued assets.

Best of luck!

Michael

Sherwin Gonzales · Answer

@Jeff L., where is "everywhere" that you've analyzed these expensive 30-50 unit properties?

We just closed on a property in Stockton and also looking for another 16+ units and expand to Sacramento. Based off the deals we've analyzed, the cap rates are too low and the prices are high for the gross rents. The Sacramento market is too pressured right now. The owners/ sellers know that the market is hot and that no new apartments are being built, which is why they're charging a premium.

I agree with @Michael Kovac in that the best move to find a good deal for these larger commercial buildings is to network with as many commercial brokers as you can. Hopefully you'll be on their buyer's list and you'll get deals emailed to you and to all their network of investors. They key here is to build a relationship. Show them your interests and show that you're active.

Good luck with whatever you plan to do!

Sam Shueh · Answer

That is no longer doable. Try Salinas. It was very affordable not long ago.

Jeff L. · Answer

I agree, first we need to find out where to invest and then look for a broker.

Jay Hinrichs · Answer

2 hours from SF Ukiah ? Davis ? Vacaville? Woodland ?

Cloverdale ?

little farther Lake CO.

Winters ?

going south I think its still strong market at 2 hours away.

Stockton area is pretty rugged in tenant base i would be cautious there.

a client of mine is doing quite well in Sacramento right now.

Where and how to look for larger commercial apartment buildings?

Where and how to look for larger commercial apartment buildings?

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