All Forum Posts by: Jack Sevey

 Same. Figured drop the $100 rather than spend a bunch of time searching for or developing my own. 

I'm also targeting the Phoenix and Tucson areas. Currently living in Flagstaff. Lets connect! 

1. Personally, I find the "Top 10" lists to list markets that are already very hot and saturated. I'd be happy to be proven wrong though. I typically use HUD, CBRE, and my local MLS reports to get a feel for my market. I'll search "'City name' apartment market analysis" and usually find what I need. You want to look at the following criteria (stolen shamelessly from BP episode 306).

7 criteria for choosing a market to invest in:

1. Positive Population growth
2. Positive Job growth
3. Diversified economy - You need a good spread of big employers in town. 
4. Landlord friendly - Bit more nebulous. Need to research landlord-tenant laws. For example, CA can take 9 months to evict a non-paying tenant. 
5. Business friendly 
6. In the right part of the market cycle (rising market) - I still don't know how to gauge this. I'd recommend David Lindhal's book though. 
7. Familiarity

2. I like using Trulia's statistical maps for crime. I look for working class neighborhoods that aren't overrun with crime and class D properties. 

3. You and me both good sir. 

It really depends on the market. In my market today, commercial multifamily lenders typically are lending at 70%-75% loan to value. So you can expect to put 25%-30% down. Again, this is for Phoenix so your mileage may vary. I agree with Jaysen Medhurst, call up some lenders to get an idea. I've also been able to get the LTV info indirectly through brokers.

@Ben Leybovich - would it be a disservice to use a percentage for quick underwriting?  At least in the Phoenix market, I've been underwriting a lot of offering memorandums. Realistically, I've been finding that expenses fall between 45% - 55% of gross income. Rarely do I see the expenses falling before 40% (even though the OM would like to claim that it does). 

My investing partner and I have recently decided to move into the greater Phoenix area. We are looking for small multifamily properties 5-50 units, C to B class, under $5 million with some value add potential but no major rehabs or repositions.  We'd like 12%-15% cash on cash return. My search lately has brought me 15 or so properties. The better ones seem to be around 8%-12% cash on cash. The worst one I saw was just below 6%.

I'd like to speak to a local broker regarding the feasibility of our criteria in the Phoenix market. We'd like to invest in the Phoenix metro simply due to the ease of proximity. Going to see a property after work is an easy thing to do for me. 

Thanks for help. You guys are awesome!

Hello fellow BP forum goers,

My father and I have recently started looking into AZ multifamily properties. I personally have run the numbers on around 15 apartment complexes in the Phoenix metro area and I'm looking for someone to bounce numbers off of as a sanity check. I'm new to this type of analysis and I'm comfortable running the numbers but I need help determining whether or not a seller's proforma numbers are reasonable.  

All help is greatly appreciated. I'll buy lunch or coffee for those in the Phoenix area (hooray free food!).