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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Baylor3217 on July 04, 2013, 02:00:42 PM

Title: Poke holes in this multi-family unit investment
Post by: Baylor3217 on July 04, 2013, 02:00:42 PM

I'm continuing to pursue learning more about real estate investing as a way to generate additional cash flow.

Can some of you more experienced landlords give me thoughts, ideas and / or questions about this property?

http://www.loopnet.com/Listing/17891556/4708-San-Jacinto-Dallas-TX/

Title: Re: Poke holes in this multi-family unit investment
Post by: arebelspy on July 04, 2013, 02:11:17 PM

Well I'd need to be familiar with the neighborhood, which I'm not, but one thing that jumps out is on LoopNet's Stats and Trends: This Property Asking Price $/Unit $49,583.33.   Nearby Properties $40,000

Why is this one worth 25% more than nearby ones?  (It may be, due to the renovations, particular neighborhood, etc., but it's worth digging into.)

Also LoopNet cap rates are almost ALWAYS exaggerated (anyone's cap rates, really).  And I'd think 8% is about what it should be, so if it is exaggerated your return won't be stellar.   Ask to see the owners tax returns and find out actual expenses they've claimed for the last few years.  Ask to see rent rolls and leases.  Something like this requires a decent amount of due diligence.