@Syed Naqvi Congratultions man! I just made the leap from single family homes into multifamily, and Ive been researching this stuff for months now. Here are my top takeaways:
1. Class A Core Multifamily cap rates are too compressed, you will have to look at Class B and C properties to get a meaningful ROI above your debt costs
2. Look at secondary and tertiary markets in the Sunbelt as there is less competition and more opportunity with less perfectly priced assets
3. "BEST CITIES" is going to be relative to you in a lot of ways; do you want to be hands on or outsource management? Hard to rehab a deal if its a plane ride away. If you just want the best cities and dont plan on being there to oversee, I would look at medium sized cities with low property tax rates and high job growth. TAMPA, ORLANDO, CHARLOTTE, TEMPE, PHOENIX, SALT LAKE CITY, SAN ANTONIO, etc. You have to think about where the opportunity is and where the big players haven't gone yet, while still being big enough to satisfy a bank's underwriting needs. Hard to pull CoStar reports on a town with 5,000 people
Hope this helps man, feel free to DM me anytime
Here's my IG: @dshumphreys
