Multi-Family

[jamievaughan10]

I was hoping someone could help me better understand multi-family. When you are looking at a property, how do you determine a good price. It is tough to use the direct comparison approach because there are are not many for sale, so is it the cap rate? In a particular area, how do you determine what a good cap rate is?

Also, you could divide price by the number of doors to get a per-door price, is this used?

I am looking to do a joint-venture in this area, so i would appreciate any help.

Thank you.

 

[housingrental]

Yes to price per door
Yes to sold data cap rates
You can (somewhat) determine this by looking at sold data (easily sent to you by a realtor)

However in any area there will be variance between properties for many factors (que Thomas Beyer providing link to already well written list

:

Condition - Ie two properties next door to each other could sell at same time for different cap rates becuase one is AAA other needs new roof, new boiler, new parking lot, etc..

Location - A building might sell at premium cap for being in an area with the perception of more stable revenue source or additional future upside (closer to transportation / jobs / amenities, closer to being constructed shopping center etc.., upside on land re larger lot + zoning allows for further development (ie building sells at $70K/door + $10K/potential new door implied land value, etc.)

Changes in operating environment - Market cap rate increases / decreases over time so sale from 1 year ago might be at 6.5% cap and now at 6.75% cap, etc..)

 

[RussellWestcott]

Hey Great news to everyone interested in Multi-Family investing.

The Real Estate Investment Network™ Canadian Multi-Family Investing Workshop is coming in August (28- 29) -- Edmonton Alberta.

We are finalizing many of the details, and should have most of the details ready for early next week (including the all-star line up of Canadian Multi-family Investing experts)... there will not be an event like this anywhere in Canada.


This event will be FREE for REIN™ members (who are pre-registered), and a small investment for non-REIN members interested in attending ... REIN™ members will have first option to grab the seats.

Stay tuned early next week for more of the details, but you will want to set the time aside in your calendar now.

August (28- 29) -- Edmonton Alberta

Click here for all the details

 

[harland]

QUOTE (RussellWestcott @ Jun 16 2010, 10:30 AM) Hey Great news to everyone interested in Multi-Family investing.

The Real Estate Investment Network™ Canadian Multi-Family Investing Workshop is coming in August (28- 29) -- Edmonton Alberta.

We are finalizing many of the details, and should have most of the details ready for early next week (including the all-star line up of Canadian Multi-family Investing experts)... there will not be an event like this anywhere in Canada.


This event will be FREE for REIN™ members (who are pre-registered), and a small investment for non-REIN members interested in attending ... REIN™ members will have first option to grab the seats.

Stay tuned early next week for more of the details, but you will want to set the time aside in your calendar now.

August (28- 29) -- Edmonton Alberta

The home study - Multi Family Goldmine Program - offered for sale from REIN is well worth the money. I would recommend it ti anyone serious about investing in multi`s.
Delanee Jmaiff

 

[Rickson9]

QUOTE (jamievaughan10 @ Jun 16 2010, 12:12 PM) I was hoping someone could help me better understand multi-family. When you are looking at a property, how do you determine a good price. It is tough to use the direct comparison approach because there are are not many for sale, so is it the cap rate? In a particular area, how do you determine what a good cap rate is?

Also, you could divide price by the number of doors to get a per-door price, is this used?

I am looking to do a joint-venture in this area, so i would appreciate any help.

Thank you.

In order to prevent myself from wasting time, my personal shorthand for determining a price where I would be interested, is to take annual gross revenue and multiply by 5. If it meets that criteria, I will take a closer look.

 

[Thomas Beyer]

QUOTE (Rickson9 @ Jun 16 2010, 12:55 PM)
In order to prevent myself from wasting time, my personal shorthand for determining a price where I would be interested, is to take annual gross revenue and multiply by 5. If it meets that criteria, I will take a closer look.


What part of the world do you buy in ? Small dieing towns, depressed US areas or rural Quebec ?



A GRM (gross rent multiplier) of 10-12 is common in W-Canada. A GRM of 5 does not exist in viable cities in Canada unless

a) you got lucky

b) the town has ex-migration

c) the town is extremely small and thus, very high risk (say < 4000 people)

d) it has a major deficiencies that has to be adjusted with a huge price reduction (say a bed bug infestation or major structural retrofit or a new roof plus new siding)



Related posts:



Items to consider when buying an apartment building: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-14548-Buy_vs_Build.html



Multi-Family Primer in May 2009 Issue of Canadian RE Magazine:

http://myreinspace.com/public_forums/Real_Estate_Discussion/62-14548-Buy_vs_Build.html

 

[jamievaughan10]

QUOTE (ThomasBeyer @ Jun 16 2010, 10:41 PM)
What part of the world do you buy in ? Small dieing towns, depressed US areas or rural Quebec ?



A GRM (gross rent multiplier) of 10-12 is common in W-Canada. A GRM of 5 does not exist in viable cities in Canada unless

a) you got lucky

b) the town has ex-migration

c) the town is extremely small and thus, very high risk (say < 4000 people)

d) it has a major deficiencies that has to be adjusted with a huge price reduction (say a bed bug infestation or major structural retrofit or a new roof plus new siding)



Related posts:



Items to consider when buying an apartment building: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-14548-Buy_vs_Build.html



Multi-Family Primer in May 2009 Issue of Canadian RE Magazine:

http://myreinspace.com/rein_members_only1/Members-Only_Discussion/81-10996-Multi-Family_Primer_-_May_2009_Issue.html




Thanks for the help everyone. I am looking in Maple Ridge and Surrey right now. Doing my due diligence and seeing what is out there. Your comments are always helpful Thomas.

 

[frdm35]

QUOTE (RussellWestcott @ Jun 16 2010, 10:30 AM) Hey Great news to everyone interested in Multi-Family investing.

The Real Estate Investment Network™ Canadian Multi-Family Investing Workshop is coming in August (28- 29) -- Edmonton Alberta.

We are finalizing many of the details, and should have most of the details ready for early next week (including the all-star line up of Canadian Multi-family Investing experts)... there will not be an event like this anywhere in Canada.


This event will be FREE for REIN™ members (who are pre-registered), and a small investment for non-REIN members interested in attending ... REIN™ members will have first option to grab the seats.

Stay tuned early next week for more of the details, but you will want to set the time aside in your calendar now.

August (28- 29) -- Edmonton Alberta


Russell,

I`m looking foward to hearing more about the course in August. Can you please advise whether any more F4 Multi-Family Investing home study program will be available for purchase?