Criteria for Multi-Family

[Logan Williams]

Looking to get some feedback from Multi-family investors around the valley:  In the current market, do investors typically look for already cash-flowing units, or do investors prefer the ability to add value through renovations and raising rents? 

[Rick Martin]

If we are talking about right now, I think investors want to see some conservative LTV, fixed-rate debt and early and consistent cash flow. Now is probably not the time for more speculative investments. If they see a discounted price based on current market conditions, they might feel better protected. The potential to add value is key, but through forced appreciation and not organic rent growth.

In normal conditions, I would say higher net-worth investors seek higher total return over cash flow, but right now I sense people are a little gun shy with what the future might hold.