Stats to look for in a large multi

[Rob Barry]

I'm looking to learn the ropes of large multi-family complexes with a goal to acquire one with 30 doors in the next few years. So I wanted to asked more experienced investors what they look for in a large multi deal.

Apart from buying in a strong and growing market, what do you look for in terms of cap rate, property layout, types of value ads etc?

I've heard people throw around a target 10% cap for large multis. Is that reasonable or rare? Thanks in advance.

[Chris Eaker]

@Rob Barry

Check out some of the multifamily educators out there. I highly recommend Michael Blank (I'm personally one of his students) and Rod Khleif. They both have excellent free resources and podcasts. If you want more, you can sign up with their coaching. Other podcasts you'll want to follow are Jake and Gino's Wheelbarrow Profits Podcast and Old Capital's Podcast. 

As for what I look for, I want properties that provide the high single digits cash-on-cash return once the property is stabilized, and an overall IRR of at least 12%-15%. These are the criteria I have been using to locate deals:

• Multifamily residential property in Tennessee, Virginia, South Carolina, North Carolina, Kentucky, Alabama, Georgia, Indiana, and Ohio.
• Suburbs, Secondary & tertiary cities
• Garden style (2 to 3 stories)
• Utilities separately metered or ability to sub-meter or implement RUBS
• 60+ units
• Class C properties in Class C or B markets
• Stabilized properties (>80% occupancy)
• Pitched roof (no flat roofs)
• Some value-add opportunity, such as
  • Improve/modernize units
  • Increase occupancy
  • Increase revenue
  • Reduce expenses