All Forum Posts by: Nadeem Arshad

Thanks Albert. From a strict buy-and-hold perspective--i.e. not taking into consideration the future marketability--should an apartment building in an SFH-dominant neighborhood command a higher cap rate at present? 9.75% may be attractive in other markets, but in this scenario, it seems low, no?

Thanks, Jeb. Just curious, but why a 20% cut? Is that standard practice in this type of scenario or just fairly arbitrary? Along with my business partner, I am meeting with the owner and agent tomorrow. I do not want to enter discussions without strong talking points.

What would be a decent cap rate? at least a starting point to guide negotiations?

Apartment complex listed at $1.25M, 22 units.

All units in the $625-$700 range. Reported cap rate of 9.75%

Things to consider: 

- One of the buildings has only one meter, so landlord pays all utilities (gas, electric, water). Cost or re-metering might be hefty.

-No vacancy rate reported, as owner claims 100% vacancy, with waiting list. You could potentially factor in a 10% vacancy to be conservative.

-Some section 8 tenants. 

Hello all, I recently came up across a small apartment complex (4 buildings, total of 22 units) which would be part of a 1031 exchange from a previously sold retail plaza. The potential downside is that most of the units are studios and efficiencies with high tenant turnover. It is also a building that was built in 1960. The upside is that the units stay rented, have a waiting list of prospects, and is located in a decent, quiet neighborhood with primarily single family homes. What are some long term concerns I should have in partaking in this investment? Any and all input would be greatly appreciated, especially from those of you who have had prior experience with this type of property investment.