I think a lot of multifamily is top cycle and tapped out right now.Wage increases are stagnant for the middle class and are not keeping up with inflation.

Every part of my estimate has been "inflated" for my initial estimate.

Tenants that are one flat tire away from missing rent will not result in quality cash flow, and yet ironically these type of tenants are the kind that tend to rent in the type of neighborhoods that show the highest pro forma cash flow projections on paper ... too bad those cash flows aren't what you will actually get during a downturn, and you spend much of your time chasing down rent as opposed to growing your portfolio ... too bad that the increases in rents and prices will not tend to keep up with inflation in many of these neighborhoods too ...

IMO, you need to be underwriting to IRR, not CoCR ... your market does not appear to even keep up with inflation, so great looking CoCR is not likely to look so great in 10+ years.

Since the lease is based on a percentage of sales there is a lot of potential upside if sales even increase by 2-3% a year to keep in line with inflation.

Flipper took advantage of the market realities and certainly contributed to price inflation.

My "risk" is just having it in a boring savings account that probably yields something less than rate of inflation :-/

If you have a $15-20,000 rehab, then his $10,000 seems over inflated by a lot.

I have a client we will call Bob who is fixing his father in law(we'll call Mike)'s home and selling the home for an inflated price after the remodel is complete.  

20 years of inflation and now you're not sitting on a hefty chunk of wealth, remember, I started with 2 million...and I lived off that cash flow...Basically I would have very little left....