Deal Feedback - 8 unit value add

[Alicia Sierra]

This is a deal we sent out to our St Louis MO investors recently and I'd love to hear feedback on here:

Investment Snapshot – 8 Unit 

Asset: 8-Unit Multifamily (All 2 Bed / 1 Bath)
Location: Affton, St. Louis County
Strategy: Light Value-Add via Rent Stabilization
Asking Price: $1,130,000

💵 Upside at a Glance

• In-place average rent: ~$1,070
• Market rent: ~$1,295
• Rent upside: ~$225/unit/month
• Total annual rent upside: ~$21,600+

🔧 Turnover Assumptions (Conservative)

• 2 units require standard turnover
• Budget: ~$8,000 per unit
• Total capital estimate: $16,000
• Covers paint, flooring, light kitchen/bath refresh, and make-ready

📈 Stabilized Performance

• Estimated Stabilized NOI: ~$102,700
• Stabilized Value (7.25%–7.0% cap): ~$1.40M – $1.45M
• Net Forced Equity (after turns): ~$275K – $325K

📍 Why Affton, MO

Affton is a highly stable South County submarket known for strong tenant demand, limited new multifamily supply, and proximity to major employment corridors. Investors value the area for consistent occupancy, reliable rent collections, and downside protection, making it well-suited for long-term holds and refinance strategies.

🧠 Investor Takeaway

This deal creates value through controlled rent growth and light unit turns, not aggressive assumptions. A modest capital investment unlocks durable NOI growth and meaningful forced appreciation in a proven St. Louis County location.

[Greg Kasmer]

Quote from @Alicia Sierra:

Hello - this is a deal in my market that I have a client contemplating and I value feedback here on B P.  Cap rates in our market average around 7%.  Next assessment year is 2027 (assessments in St Louis County are every other odd year) and it is very possible they will go up based on the sale, yes.  Good call - that should be folded into the projects.   The renovation costs are based on average turn over costs for units that size - we have not walked or inspected the property.  Timeline on a basic turnover is typically 2-3 weeks. Thank you for the thoughtful questions. 

 Alicia - I would definitely walk the property with a keen eye towards renovation costs. It would be best to include a contractor in the tour, but as a substitute perhaps take a TON of photos or take a video of each unit. I would also build in some extra vacancy factor into the first year to allow for renovation time as well as lease up time post renovation. Good Luck!