Finding the Perfect Purchase
In real estate investing, finding the perfect multifamily asset to purchase has little to do with the actual real estate. Blink blink. What? No, really. Why? This is because any particular piece of real estate is only as important (read; as valuable) as the content of its surroundings. Finding the perfect asset begins with quality market research.
Meaning: a specific real property asset is defined by the market dynamics represented in surrounding economic activity.
Saying a particular piece of property is perfect is like saying you have seen the perfect fastball. Even if this were true, how do you repeat it, again and again? By identifying markets with similar attributes to those surrounding your original premise (or perfect asset) adjusting, and making incremental improvement to the model.
For income property purchases the market and submarket defines the asset- other than trophy properties. This is never the other way around.
The primary service providers of multifamily market data are similar to the well known rating agencies of S&P and Moody's whereas they tend to swing in the same direction in the broader scope of trends.
REIS , MP/F and Axiomatics are all quality service providers. Their forecast will vary on market specifics (sometimes significantly) but they all get it right on matters of national scope. All three say multifamily will maintain it's pricing power in 2012.
Finding the perfect asset begins with quality market research. The three service provides noted above represent a really good place to start.
-- John Wilhoit, Jr. Releases Multifamily Insight Book on Amazon --
Multifamily Insight Volume 1 delivers hard hitting facts about how to buy and operate multifamily apartment assets. Multifamily Insight Volume 1 teaches its readers how to apply techniques to increase revenue and control expenses in today
Comments (5)
About 30% of the U.S. population live in apartment homes. That's around 100 million people. Most have one bath. Many have laundry facilities on the premises, but not in the unit. The biggest driver to tenant selection is proximity to jobs. Then price, then amenities.
John Wilhoit, almost 12 years ago
Multi's can be tough..let's face it..most people don't want to live in an apartment so location, in-apt washer and dryer hook-up, garage, 2 baths, attractive entry and hallways, ample storage, no road noise are amenities that make the investment work
cynthia schmidt, almost 12 years ago
In these short blogs I attempt to point to one or more resources that can assist a buyer in getting it right- for the buyer. The broad-level theory is intentional. Use of the service providers noted can assist in validating quality of a submarket and asset. As David points out, there is a distinction between the two.
John Wilhoit, almost 12 years ago
The title drew me in, but, what I got from this article was not helpful in finding a "perfect purchase" rather crusty, broad-level theory and a link to some sites supporting multifamily investment. Also, the comment left by Mr. Wedemire is accurate in my (albeit novice) opinion.
Rob Simpson, almost 12 years ago
It does make sense when talking about multifamily. But still a Class B in a Class A neighborhood is still a Class B
David Wedemire, about 12 years ago