What's Your Deal? Good Deal? Bad Deal?

7 Replies

Hi All! First of all, I'm loving this community. So many active and knowledgeable people! It's awesome!! Okay so, there's a lot of talk about, "getting/finding a good deal". To me a great deal in a multi-family apartment building (+5) would be: CAP Rate >= 8% CoC Return >= 12% DTI >= 1.6 Now, good luck finding that on the market. So, what are the next best numbers for Multi-family on the market? What numbers do you need to hit?

I’ll do anything that’s 10 percent or better with CoC return and cash flows 150 or more per month per door

Originally posted by @Jason S. :

@Bill F. - A coach, set those numbers as a criteria that investors would want to see when investing their money upon purchase. 

That puts the cart before the horse. What type of investors want to see that return profile? Value add folks, low risk, low leverage people, growth individuals? 

What type of investor are you?

Are you looking for those returns day one, 12 month in, three years in?

Investors aren't a monolithic bloc of people who all want the same thing. Different people have a variety of endstates for their capital which in turn produce contrasting goals and metrics.

With return metrics the why behind them is much more important than the number themselves. They also only tell a portion of the story. The other side of the coin is risk. 

In short, taking someone else's metrics is a less than optimal choice, since there is nothing to say that they will work for you. Its better to do the leg work and come up with your own criteria based on your knowledge, skills, and abilities. Then find investors who share your view.

Originally posted by @Jason S. :
@Joe Villeneuve Where are you finding those deals?!?

 The question was, "What numbers do you need to hit...?"

Those are the numbers I need to hit.  Didn't say I hit them, which is why I don't buy multi-family.