102 Unit Apartment Complex in San Diego
Rental Property Investor · Tustin, CA · Member since 2019 · 63 posts · 29 votes
102 Unit Apartment Complex in San Diego
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Kerlous TadresBusiness Member
Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes@Jamison Remmers, most Crexi "NOI" numbers are optimistic, and when you add real vacancy/expenses plus today's loan payment, a lot of deals won't cash flow at normal down payments. I'd only take negative/flat cash flow if there's a clear plan to raise rents or cut expenses fast, or you can get better terms like lower price, seller financing, or assumable debt. Otherwise, look at a more affordable market.
Kerlous Tadres | Reafco Real Estate540 Reviews
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- Specialist · Member since 2026 · 53 posts · 25 votes7moIn markets like San Diego, it’s not unusual for leverage to break the cash flow. A lot of larger multifamily there trades more on appreciation, rent growth assumptions, and capital preservation than on immediate yield. If 50% down is what it takes to get positive cash flow, that’s usually a signal about cap rates relative to debt, not necessarily that your math is wrong. The key question is whether you’re underwriting this as a yield play or an appreciation play. Personally, I’d be cautious about assuming rent increases will “fix” negative cash flow unless there’s clear operational upside. If the deal only works with higher leverage assumptions or future growth, that’s a different risk profile than buying something that supports debt from day one.
- Rental Property Investor · Tustin, CA · Member since 2019 · 63 posts · 29 votes7mo
Thank you for this response @Pavel Voroniuk, and I totally agree. I looked over some of my numbers, and I think I'm deducting the expenses and vacancy from the NOI after these amounts have already been taken out, but I have to confirm the numbers with the brokers. I'm looking at other states, and the numbers are MUCH better. If you or anyone you know ever wants to partner on an investment property, I'd love to talk more. Cheers, Pavel.
- Member since 2026 · 4 posts · 1 vote7mo
Have you considered commercial real estate? You can pass expenses like property taxes, insurance and common area maintenances to your tenants. I'm a commercial real estate agent out of San Francisco and help manage properties at the firm I work for. Commercial real estate are very lucrative investments.
- 7moBo SmithPro MemberHinton, WV · Member since 2026 · 1k+ posts · 373 votes
Your 35% expense ratio might be high for most properties. Real issue: Crexi shows pro forma NOI, not actual. Always ask for T12s first. What class properties are you targeting?
- Rental Property Investor · Tustin, CA · Member since 2019 · 63 posts · 29 votes7mo
Quote from @Bo Smith:
Your 35% expense ratio might be high for most properties. Real issue: Crexi shows pro forma NOI, not actual. Always ask for T12s first. What class properties are you targeting?
@Bo Smith Thank you for your feedback. I've seen that some list the pro forma, and some list the after-expenses NOI, but I'll definitely confirm all numbers once I partner with an experienced investor and we discuss the parameters we're looking for as far as location, cap rate, ROI, etc.
I've been focusing on B and C class properties for the most part. I'm ensuring they have value-add opportunities and room to raise rents.
What are you currently focusing on yourself? And if you know anyone who may be interested in partnering on some deals, I'd really appreciate the introduction.
- 7moBo SmithPro MemberHinton, WV · Member since 2026 · 1k+ posts · 373 votes
Quote from @Jamison Remmers:
Quote from @Bo Smith:
Your 35% expense ratio might be high for most properties. Real issue: Crexi shows pro forma NOI, not actual. Always ask for T12s first. What class properties are you targeting?
@Bo Smith Thank you for your feedback. I've seen that some list the pro forma, and some list the after-expenses NOI, but I'll definitely confirm all numbers once I partner with an experienced investor and we discuss the parameters we're looking for as far as location, cap rate, ROI, etc.
I've been focusing on B and C class properties for the most part. I'm ensuring they have value-add opportunities and room to raise rents.
What are you currently focusing on yourself? And if you know anyone who may be interested in partnering on some deals, I'd really appreciate the introduction.
Smart approach on the B/C class with value-add - that's where the real opportunities are. I focus on similar stuff, mostly off-market deals through direct mail and cold calling since the MLS competition is brutal. If you're serious about partnerships, I'd suggest connecting with local REIAs first - way better vetting than random introductions and you'll build real relationships. - Rental Property Investor · Tustin, CA · Member since 2019 · 63 posts · 29 votes7mo
Quote from @Bo Smith:
Quote from @Jamison Remmers:
Quote from @Bo Smith:
Your 35% expense ratio might be high for most properties. Real issue: Crexi shows pro forma NOI, not actual. Always ask for T12s first. What class properties are you targeting?
@Bo Smith Thank you for your feedback. I've seen that some list the pro forma, and some list the after-expenses NOI, but I'll definitely confirm all numbers once I partner with an experienced investor and we discuss the parameters we're looking for as far as location, cap rate, ROI, etc.
I've been focusing on B and C class properties for the most part. I'm ensuring they have value-add opportunities and room to raise rents.
What are you currently focusing on yourself? And if you know anyone who may be interested in partnering on some deals, I'd really appreciate the introduction.
Smart approach on the B/C class with value-add - that's where the real opportunities are. I focus on similar stuff, mostly off-market deals through direct mail and cold calling since the MLS competition is brutal. If you're serious about partnerships, I'd suggest connecting with local REIAs first - way better vetting than random introductions and you'll build real relationships.I appreciate that advice, Bo. I'll look into local REIA's. 👍 Direct mail is a great approach. If I can ever help your goals in any way, I'm here. Maybe one day you and I can partner on a multifamily deal when the time is right. If you're ever in the Orange County, CA, area, maybe I can buy you a coffee or lunch.
- 7moMayo GilfurtPro MemberReal Estate Consultant · Connecticut Ct · Member since 2026 · 130 posts · 30 votes
What you’re seeing is normal for coastal, stabilized multifamily at today’s rates. Many buyers aren’t buying for Day-1 cash flow — they’re underwriting to rent growth, expense optimization, and exit cap assumptions. 50% down isn’t common, but it does tell you the deal is priced for yield compression, not income.
- 7moKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
@Jamison Remmers, most Crexi "NOI" numbers are optimistic, and when you add real vacancy/expenses plus today's loan payment, a lot of deals won't cash flow at normal down payments. I'd only take negative/flat cash flow if there's a clear plan to raise rents or cut expenses fast, or you can get better terms like lower price, seller financing, or assumable debt. Otherwise, look at a more affordable market.
Kerlous Tadres | Reafco Real Estate540 Reviews - 7moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 939 votes
Jamison, it sounds like you’re thinking like a seasoned investor already. Coastal markets like San Diego often require huge down payments to cash flow initially, many buyers there rely on appreciation or operational upside rather than Day-1 income. If your goal is immediate cash flow with value-add upside, I’d recommend looking at more affordable Midwest markets. There, you can pick up B and C-class multifamily with real positive cash flow, strong Section 8 or market rents, and plenty of value-add opportunities. I actively scout off-market deals in the Midwest and surrounding areas, and I have properties that are already performing with upside built in. If you want, I can send a few examples and we can see if any align with your investment criteria.
- 7moBen FernandezBusiness MemberRealtor · Lancaster, PA · Member since 2025 · 169 posts · 97 votes
Use the OM to determine the opportunities while also confirming an accurate cap rate has been used to align to the property's current market value (and/or listed price).
Between operating costs and the cap rate is where you'll find the potential opportunities and if it's accurately valued, respectively.
Never buy based upon projections versus actuals. Buy based upon the NOI and an accurate cap rate (or the current market value).
Between these two metrics, is where you'll identify when a property is accurately priced, over-priced or is a motivated seller. One of these should always be identifiable.
Just don't let hidden figures manipulate accuracy. It is common that figures can be misleading and/or misrepresent thorough underwriting, if you don't know multiple methods of landing on accuracy.
- 7moAdam KingBusiness MemberReal Estate Agent · San Diego, CA · Member since 2023 · 87 posts · 45 votes
Great question, and honestly, you’re not off base at all. What you’re running into is pretty typical with on-market multifamily deals right now, especially in stronger coastal markets.
A couple things to keep in mind:
First, Crexi numbers are usually optimistic.
The NOI shown is often pro-forma and a bit light on real expenses. Taking out ~5% for vacancy and 30–35% for expenses is actually solid underwriting. Most people don't even go that far, so you're already ahead of the curve.Why it only cash flows with a big down payment.
At today’s interest rates, most stabilized multifamily just doesn’t cash flow at 20–25% down unless there’s obvious upside. When you push the down payment to 40–50%, you’re basically forcing the deal to work by shrinking the debt. Some buyers are doing this, usually 1031 or all-cash buyers, but it’s not the norm for everyone.Negative or thin cash flow isn’t automatically a bad deal.
A lot of investors are okay breaking even (or slightly negative) early on if there’s a clear plan to raise rents, clean up expenses, or add value. The important part is making sure the upside is real and achievable, not just “maybe someday.”Local vs out of state.
Out-of-state deals can look way better on paper, but you’re trading cash flow for execution risk and management headaches. A deal you understand well locally can sometimes outperform a better spreadsheet deal elsewhere.If it’s helpful, I’m a local, investor-focused broker and property owner, and this is the kind of stuff I work through every day. Happy to:
- Re-run the numbers on any Crexi deal using real local expenses
- Pressure-test rents vs actual market, not broker pro-formas
- Help you figure out if cash flow can realistically be created—or if it’s a pass
I’m also open to partnering on the right deal if the numbers and strategy line up, especially on value-add multifamily.
If you want, send over one deal you like but can’t quite make pencil. Worst case, you get clarity. Best case, we uncover something the listing numbers aren’t showing.
Either way, you’re asking the right questions—that alone puts you ahead of most buyers.
Adam King - NewTown Real Estate521 Reviews - 5moMasoud ArouniPro MemberInvestor · Pleasanton, CA · Member since 2026 · 119 posts · 52 votes
@Jamison Remmers — two months later but this thread deserves a sharper answer than it got.
Everyone told you Crexi NOI is optimistic, but nobody told you what to do about it.
Here is what brokers do on a 102-unit San Diego listing. They annualize the best performing month. They exclude property management fees entirely or show them at 3-4% when real San Diego rates run 6-8% on large multifamily. They use 3-5% vacancy when actual market vacancy in that submarket may be running 8-12% (2-3 months). They exclude capital reserves completely. They show insurance at last year's renewal when San Diego insurance has moved 20-30% in the last 18 months. They list property taxes at the current owner's basis, not what yours will be after reassessment at your purchase price.
Run every single one of those corrections and the NOI on a typical San Diego 102-unit drops 20-35% from what Crexi shows. If the broker is showing $900K NOI the real number is probably $600-700K. At a 4.5% cap rate that means the property is actually trading closer to a 3.2-3.5% real cap rate. At today's debt costs that deal does not work at 20% down, 30% down, or 40% down. It barely works at 50% down and only if you believe your rent growth (above 5%) assumptions will bail you out in years 3-5.
The only document that tells you the truth is the trailing 12-month operating statement — the T12, signed by the current owner. Not the OM. Not the broker's pro forma. The T12, if the seller will not produce it, walk away before you spend another hour on that deal.
Your instinct to look out of state is correct. The San Diego market is priced for yield compression and appreciation assumptions that require a very long hold and a very patient balance sheet. If you need cash flow from day one, you are in the wrong market.
- 5moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesHi Jamison! What you’re running into is pretty common when people start underwriting off Crexi numbers, because the NOI shown there is often either simplified or based on assumptions that don’t fully match real-world T12s, so your instinct to stress test it is good. A 5% vacancy assumption is pretty standard, but 35% expense ratio can be on the light side depending on the asset (taxes, insurance, management, maintenance, and especially capex can push that higher pretty quickly), so it’s not unusual for deals to “lose” cash flow once you get more realistic. The bigger point though is that raising the down payment to force positive cash flow usually isn’t the right fix—it just changes your leverage, not the actual quality of the deal, and you can end up tying up a lot of equity in a low-yield asset. What matters more is whether the in-place rents, actual expenses (from T12, not pro forma), and current financing support the return profile without needing optimistic assumptions or future rent growth to bail it out. Sometimes the honest answer is just that the deal doesn’t work at today’s pricing/rates, and that’s okay—it’s better to pass than to over-equitize a marginal asset. A lot of investors either tighten criteria, look for value-add upside where rents are clearly below market, or expand their search to other markets where price-to-rent ratios still make the math work more naturally. Happy to connect and answer any questions you have!
Quote from @Jamison Remmers:
I'm on Crexi.com looking for a multifamily investment property, and I came across this gem. I've been deducting 5% for potential vacancy and 35% for expenses from the NOI displayed on the website. While running my numbers, I'm finding that this eliminates any chance of cash flow from almost every property.
I've messed around with the numbers to see how I can get the cash flow to positive, but I'm curious if I'm doing things correctly. If I raise the down payment to around 50%, the cash flow is positive, but that seems like a rather large down payment. Is this a method people are using to offset the expenses, or is negative cash flow expected until you acquire the property and raise rents to achieve the desired ROI?
Thank you all for your help and advice. I'm debating looking out of state if I can't find a property with positive cash flow locally.
Jimmy Lieu, Red 1 Realty4.9120 Reviews - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes5mo
In a market like San Diego, where cap rate will most likely be below the cost of borrowing, it is going to require a substantial down payment to get the asset to cash flow. The money isn't made on day one; it's holding these assets for a long period of time where rents continue to increase. With the lower cap rates, we'll continue to increase that valuation. As mentioned, on assets like this, it will require a greater down payment.
7e investments53 Reviews - Lender · New York City · Member since 2026 · 17 posts · 8 votes5mo
You’re not doing anything wrong, you’re just running into the reality of today’s market.
A lot of the listings on sites like Crexi are marketed off optimistic numbers. The NOI they show is often based on pro forma rents, lighter expense assumptions, or ideal occupancy. When you layer in a real vacancy factor and true operating expenses like you're doing, the deal usually tightens up fast.
What you’re seeing with needing 40 to 50 percent down to make it cash flow is pretty common right now, especially in stronger markets. Debt is expensive, and cap rates have not fully adjusted. So unless you’re getting a true discount or finding mismanagement, most deals don’t pencil for immediate cash flow at higher leverage.
Most experienced investors are doing one of a few things. Either they are putting more money down to stabilize the deal, accepting thinner or even slightly negative cash flow in the short term with a clear plan to increase rents, or they are simply passing and waiting for better opportunities. Some are also shifting to different markets where the numbers still make sense.
The key is not to force a deal just to make the math work. If it only works when you start stretching assumptions, it is usually the market telling you to move on.
- 5moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Jamison Remmers:
I'm on Crexi.com looking for a multifamily investment property, and I came across this gem. I've been deducting 5% for potential vacancy and 35% for expenses from the NOI displayed on the website. While running my numbers, I'm finding that this eliminates any chance of cash flow from almost every property.
I've messed around with the numbers to see how I can get the cash flow to positive, but I'm curious if I'm doing things correctly. If I raise the down payment to around 50%, the cash flow is positive, but that seems like a rather large down payment. Is this a method people are using to offset the expenses, or is negative cash flow expected until you acquire the property and raise rents to achieve the desired ROI?
Thank you all for your help and advice. I'm debating looking out of state if I can't find a property with positive cash flow locally.
WHy are you assuming you have to offer what they are asking for?
RUn your numbers backwards to determine a price to offer😎
Logical Property Management4.9459 Reviews
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