Rental Property Investor · IL · Member since 2019 · 285 posts · 137 votes
BP,
I am an investor in the midwest area (Illinois). Most of my purchases have been anywhere between 50-65K per unit. I currently have a 6 unit deal on the table but the price per door is 98k. Granted, these are very nice townhomes with outstanding rents in an outstanding area. It isn't a cash flow beast at these numbers, but it's definitely cash flow positive. It is a newer asset, built in 2004. I do see it appreciating tremendously in the future. Long story short, I am a little uneasy paying the premium per door. Any feedback would be appreciated! Thanks.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y
I like it as a sanity check and an indication of where the property may stand in the market, but I do not see it as a decent gauge of future value or cash flows. There are much better ways to figure that out.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y
I like it as a sanity check and an indication of where the property may stand in the market, but I do not see it as a decent gauge of future value or cash flows. There are much better ways to figure that out.
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
4y
For me, price per door is NEVER a key metric for deciding whether or not to purchase. I've bought some at over $200K per door and passed on others at $80K per door.
Thank you for the feedback guys. I realize this changes depending on what market you're in. Obviously somewhere like California is going to be different than IL.
Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
4y
I haven't invested in anything this large but here are some good pointers that investors around me use.
1. Set a cap rate that you desire and taking nothing less.
2. Be extra cautious of expenses and be sure to get the accurate history of them on specific listings. Listing agents sometimes list big unit buildings and don't accurately represent the numbers behind these assets and they can appear to be performing far better than in reality.