Small apartment complex analysing

[Patrick Brown]

this is just a question of the basics to look for when analysing apartment complexes. I live in Baltimore Maryland and have two single family rentals currently and have found that it is just two slow of a build up to what my goals are and am really looking seriously into apartment complexes somewhere between 15-50 units I've been looking at a few that have about an 8% cap rate but was wondering what could I look for to see if that's actually a good deal. Also what are the most common value adds that I could look for being able to do, really anything other then adding separate metering and general updating/cleaning up. I would really like to have at least one apartment deal under my belt by my 24th birthday on may 30th. Sorry if my grammar isn't the greatest it's not my strong suit.

Thank-you in advance for any help and advice from any and everyone.

Patrick Brown

PBHomes LLC.

[Mike Dymski]

Good question. Below are some items to look for:

Below market rents - Call around and/or use rentometer.com to determine market rents compared to subject property.

Maintenance - Landscaping and trees not maintained, dirty facade, parking lost striping faded, doors/shutters/railings faded or poor paint, siding moldy, lighting out

Marketing - If you can't find the property marketed anywhere (zillow, hotpads, craigslist, apartmentfinder, etc.), it's not being marketed properly. Ask the owner how they market and if you hear "word of mouth", the "phone book" or "sign in window", game on.

100% occupancy - Shows they may not be trying to maximize the rent and prefer to stay below market for ease of management (or ignorance).

Rent roll - Tenants on the rent roll for 3+ years with no rent increase

Rent roll - Rents all set at $25 or $50 increments

P&L - Shows $0 late fees

Management - Self managed

Vendors - Only use subcontractors (they don't use MF specialists for painting, flooring, equipment)

Not all inclusive and not all are value add flags by themselves but some signs to look for.