Difficulty in the ABQ Market??

[Fionna Chau]

Hello BP community! My fiancé and I are interested in the multi-family market in ABQ, we are OOS investors from Los Angeles. We currently have no inventory in our portfolio, but in comparison to home prices here in LA, we thought ABQ would be "easier" to start our real estate investing journey.

We were wrong... although prices are lower in comparison to LA, we are having difficulties finding deals worthwhile. Properties don't even come close to passing the 1 % test (which I know isn't the end all parameter) because market rents are fairly low in comparison to listing prices. IT'S DEFINITELY A SELLER'S MARKET! I find that sellers are listing their properties way above market value especially in desirable areas like Nob Hill. When I'm running the numbers the COCROI is mediocre at current rents and even with raised market rents it's still eh. 

I know there is a lot of potential for growth and appreciation in ABQ with Netflix and Amazon, my fiancé is in the film industry and we have seen first hand how much jobs it creates in areas where big studios resides. Just wanted an open discussion about the current ABQ markets, hear other investors' success stories, mastermind together about the market, etc!

Thank you for reading my 1st post! Hope everyone is doing well and healthy!

[Joshua Young]

@Fionna Chau local broker here. I think it’s common for OOS investors to be surprised with how competitive our market is. There are definitely some sophisticated, aggressive investors who are not afraid of sacrificing yield just to play. I’m in the market everyday and the 1% rule is out the window. Cap rates range on average between 5-8% but if your looking in Nob Hill expect 4-5% if your lucky.