BiggerPockets

I don't understand. If you've had it for many years, you should be able to compute your ROI from the actual profits. ROI isn't really a common metric for real estate. "Capitalization Rate" is a commonly used metric. That's the net operating income / purchase price. You might use that to determine a selling price if you know what cap rates are common in your area for similar building and your NOI. Do you mean you want to try to evaluate if the suggested changes would be worth spending the money?

Sorry, I will be more specific.

Property Manager is not getting it "done" in some of the owners opinion. We are making 4% return on our equity. I know what I am getting return wise but would like to know what is appropriate.

When he needs cash flow to fund repairs he reduces distributions and gets it from us. Rents need to be raised. This is a nice property running rents 10=20 percent below market and we are trying to get the others to pay attention that all is not good here. The question better stated would be..What kind of return could someone expect on a nice property fully leased in a great location/ Hope that helps. Thanks for your input.

Steve I got your message and left you one as well.... let me know if I can help here...

I spoke to Steve this evening and there are some family members that own the majority interest in the project. His minority interest is basically trapped and he can only fetch a reduced amount because the property is operating incorrectly. There is very little debt on the project so that ROE is very low when coupled with the mismanagement.

I sent Steve the name of a securities attorney who does litigation work too to review the operating agreement for the deal to see if he can compel the management to manage the property better. If anyone has other ideas please share them. I can't think of another solution to help him exit with market rates for his portion of the equity.

What is the age of the apartment complex??

The original year built and not the (EYB) effective year built when improvements were made.

Given your complex is in California it sounds like you are banking more on appreciation than cash flow.

There is just so much information missing on this deal.How much money do you have tied up with your interest??

I don't think you can value your percentage of market rate compared to what a buyer could purchase and have total control of a property.

Example you have 100k invested as your portion in this property.As a buyer I would much rather buy into a controlling majority interest or own a property 100% and control my investment.

Would another family member not just buy out your interest?? Even if you sold at a small loss to them you would get more money than selling your interest to a stranger who doesn't have an interest in the property.The stranger will have to price the risk as high and buy real low to offset the risk and not having control.

Rather than creating a sh&t storm with your family I would just make up a compelling reason you need to exit the property and sell them your shares.You could also split up the interest and sell different percentages to different family members.You could also try to buy more shares into the property to get controlling interest.It sounds like however that everyone might be going different directions.Even if you sold at a discount it might be cheaper than going through a bunch of legal and wasted time to arrive at the same point.

Joel and Aaron,

Good advice to try and get out of the situation. Gracefully since it involves family members.

But the property is in Milwaukee, Joel. WI.

@Steven Barnes - re: the buyout clause and attorney Keep in mind that the reduced cash flow drops the value considerably. I wouldn't request a buyout with the low rents.

I've seen this scenario more than once and it can get very political with family members. Tread lightly and cautiously. Have you tried presenting your research and ideas to the rest of members to obtain a consensus?