Am I Being Unrealistic?

[John Conte]

I own a 5 unit mixed use building in the 44110, which I understand a lot of people are avoidant of but has been good to me, for the most part. Considering selling as I'm just in a different place in life, and the agent I'm talking to at the moment quoted me 175k (bought for 85) when the building was 80% occupied and would be generating a net 9% ROI at that number. I've just rented out the final unit, now the net ROI is around 12%, but the agent is still recommending the 175 number. I'm just curious how off base I am in thinking it should be around 200-225, based on the ROI, condition of the building, and multiyear leases in place for the whole building.

[Jay Hinrichs]

Originally posted by @John Conte:

Originally posted by @Jay Hinrichs:

Originally posted by @John Conte:

Originally posted by @Dave E.:

@John Conte

What is your NOI (net operating income)?

What is the cap rate?

So the NOI is around 21k, the cap rate on 175k at 100% occupancy is 12%. Even 10% supports over 200k so that's sort of where I'm coming from

that all said what about the neighborhood.. there is a reason that tough neighborhoods sell for much higher cap rates.

and prime real estate or neighborhoods sell for low cap rates..   Cap rate is fine but now you have to do location location location and risk risk risk of tenant base..  so more to it than just cap rate.

 Exactly, kind of what I was getting at in the original post. Personally over 3 years I haven’t had any type of property crime, and but for one, all of my tenants have been great, and they’re all leased for at least another year.  Past performance obviously not being a predictor for future performance and obviously if the market doesn’t support the markup then that’s that, so for me its just a question of how off base my expectations are from the perspective of other investors

Well you own it list it at a price you want.. see what the market tells you .. in this market if you do not have a contract on it within 2 to 4 weeks your over priced.. simple as that.