Looking at a 5 unit building on St Paul ST

[Jeffrey Goers]

Hi I am looking at a 5 unit on the 2400 block of St Paul St. It has an office on the first floor, and 4 small apts on the 2nd and 3rd floors. I am looking at this as a long term holding that will cash flow initially while also providing equity growth through NOI increases in the future. I would appreciate other's thoughts on this area as a long term play, as well as confirmation of the following info I have gathered:

- The building's value should be based on a going cap rate for the area of about 8.5

- The area should improve in the coming years, similar to the blocks north and south of it

Best regards,

jeff

[Russell Brazil]

Small commercial buildings, 5 to 15 units or so in our area do not typically trade based on a cap rate. So increasing the NOI will not likely force the value of the property upward. A more typical way of valuing these properties is on a price per unit basis against similar price per units.