[quote user=Lucas]10%+ yield
that exists in smaller US cities, in smaller non-institutional assets, many with with deferred maintenance and location risk.
CAP rates in the very few US cities we look at, for renovated apartment buildings, at are very similar to Canada, in the 5% range for pristine assets in good locations to 6.5% for an average asset in an average location, slightly higher but close to Canada.
However, what IS available in the US are a lot more distressed buildings, due to location, owner neglect or financing issues (or a combination of all three). You can make more money in the US in these distressed assets once you know a market very well and what type of assets trade at what values, what financing can be obtained initially and on re-finance after renovations.
Given that Texas, for example, population-wise is as big as Canada, and the Dallas area [where we own a large asset and are looking] is as big as the entire population west of Toronto's Pearson airport (10,000,000+), once cannot give a "US" or even TX or even Dallas opinion. It has to be far more specialized. Even Atlanta, GA is huge, like AB+BC+SK .. so even within one city's metroplex one must specilize.
People have drowned in rivers one foot deep on average !
So, don't look at averages, look at very specific assets in very specific location with very specific state laws and local quirks.