Originally posted by @Chris Martin:
A couple comments to prior posts.
This apartment is an old, no frills, no amenities, bread and butter, low end apartment. It's a Class C apartment that needs some (a lot of) capital infusion. It could be successful with the right ownership and management. I think the property has neither. I agree with @Eric L. about his assessment of competition. I've done limited analysis, but the $550 price tag appears correct for this apartment given their "rehab". I disagree with @Chris L. who thinks Class A properties are relevant, via the link to the article. At twice (or more) the sq.ft. price, the story is about a different market.
From a short inspection, I saw no vacant units in current marketable condition, but one was getting new carpet and paint during our visit. That appears to be their status quo rehab. That, IMO, is one of the big problems. So, any numbers above $550 are fallacy until owners perform a "real" rehab. I'm thinking of words... Lipstick. Pig.
The article focuses on the pressure that management companies and owner's are experiencing due to the decreasing population & realignment of the armed forces. It may reference specific examples of A - class properties; however, it is not only referencing A - class. It is relevant, because the present day economics are not much different.
Basically, if you were thinking of taking on a 32-unit multi for the first time, would you prefer to swim with or against the current?
