multi family in low rents market

[Rahul Bhatt]

need some help from experts here.up to now I have invested in market where the rents are $750+ per unit. now I am considering one opportunity where rents are like $ 400 it is solid c class. rents are low because that's what area support. this is in town Huntsville Alabama metro area there is a town called Decatur we are looking at a building around 50+ units. in my mind concerns are 1. maintenance will kill the deal because I have to maintain same unit for lower rents. the counter argument is labour cost is much cheaper and hard to believe but so the material cost as well.i am still keeping 60% for expenses. there actual also look like on the same range. it could be optimized but not relying on that 2. hard to raise rents. as of now some units which are below market. raising $25 or Soo seems to be possible with some upgrades I apologise if it is very vague question.as always thanks a lot for your help.

[Zachary C.]

Hey @Rahul Bhatt,

I don't personally invest in Decatur, but I have met some others that do and have gotten mixed reviews about it. Also, and I may be reading this wrong, but Decatur is not a part of the Huntsville metro area in my opinion; it requires driving out of our county and thought the one next to us and across the river, there's a lot of empty space in between. I've always felt bad for the people that commute to Huntsville from there, since they are driving into the sun both ways. I am sure you can find some better deals in the area, I rarely run into anything that rents that low (in Huntsville). Then again, I haven't done any large multifamily deals like a 50 unit. Reach out anytime, I'm always glad to help out any way I can. 

Best of Luck,