Tim and Others: What's Your Cap Rate Rule for Multi-Families

[agkatz]

What was that cap rate rule you told me once, for apartment buildings?  Was it, "Buy in the 14's, sell in the 9's?"  I can't remember.

Thanks,
Adam.

[Admin]

AK,
What you stated is a good goal to shoot for, but I wouldn't use it as a litmus test.  There are so many other factors to consider.

If I recall correctly, the gist of the conversation was that buying rundown complexes, fixing, raising rents to market, and selling works well when done correctly.  And I think we discussed the possiblity of rezoning for condominiums or separate parcels for individual sell-off.

The point being at the time was that it's difficult to find good numbers unless you plan on adding value.

In case it's been a while...
http://www.texasrealestateclub.com/articles.html#commercial