82-Unit Value-Add Deal in Roanoke, VA — Would Appreciate Input

Multi-Family and Apartment Investing
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82-Unit Value-Add Deal in Roanoke, VA — Would Appreciate Input

Victor Minaya
Investor · Member since 2026 · 10 posts · 1 vote

Currently analyzing an 82-unit value-add opportunity in Roanoke, VA and would appreciate input from experienced multifamily operators/investors.

Deal Snapshot:

• Purchase Price: ~$10.9M (actively negotiating closer to ~$10M)  
• Current NOI: ~$724K
• Cap Rate: ~6.4%  
• Occupancy: 90% (with several units previously offline impacting in-place income)  
• Unit Mix: Combination of townhomes + apartments  
• Value-Add: Interior upgrades ($6K–$10K/unit) + operational improvements  

What I’m seeing so far:

• Clear gap between current income and stabilized performance  
• Renovated units projected to push rents into ~$1,500–$1,600+ range (market supports higher in some cases)  
• Some of the 2025 performance appears impacted by units taken offline for renovations rather than true demand issues  
• Expense side appears relatively stable outside of normal repairs & maintenance  

Current Focus:

• Stress-testing rent assumptions vs. tenant base and market reality  
• Evaluating true economic occupancy vs. physical occupancy  
• Building out the right GP team (KP, capital partners, etc.)  
• Structuring the deal to support both cash flow and long-term refi potential  

Would appreciate feedback from those with experience in similar deals:

1. What would you stress-test the most here?  
2. Any red flags you’d dig deeper into before moving forward?  
3. At what price would this start to make sense for you given the current numbers?  

Always open to connecting with others active in multifamily as well.

Update after feedback from experienced operators:

Based on some great input, I’m digging deeper into a few key areas:
– Validating current rents vs. true achievable market rents post-renovation
– Reassessing the $6k–$10k/unit CapEx to ensure it actually supports rent growth
– Analyzing supply/demand in the submarket (new deliveries, tenant base, etc.)
– Stress-testing financing assumptions, especially around potential negative leverage early on

Would appreciate any additional insights from those who’ve operated similar value-add deals.

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Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
6mo

@Victor Minaya:

There is a lot that goes into this DD. But based on the info you provided key items to stress test/look into, which will likely lead to more detailed questions:

High level thoughts:
Your renovation budget is extremely light.  $10k/door does not get you much, and therefore can be hard to push rents.  I.e. trading old wood cabinets, for old wood cabinets with a coat of paint on them doesn't move rent much, typically.  

You don't mention where rents are today, so you need to make sure there is adequate movement in rents to offset the renovation costs.

Then you get to tenant demand.  What is supply looking like in area?  Does the demographics of the area support your pushed rents?  Are the "newer" apartments on waitlists, while the old ones have are sitting struggling?

Noted above: what does the supply side look like?  Is there new construction soon to be coming online that will limit your demand for a while? 

Financing Options: what are you borrowing at?  Are you in negative leverage until you can raise rents? 

While I can't speak to this deal in particular, since there are a lot of missing pieces of information, the common areas these deals fail is:
In recent years, financing structure.  Floating rate loans, specifically.  

Unforeseen, or un-budgeted Capex, often tied to cutting capex budgets to make deal work and/or only budgeting for a 3-5 yr hold, but stuck holding 7-10 yrs. So, the buyer can't pass the buck, and needs to handle the capex.

Knowing tenant demand.  I have seen some people over-improve units, when they could have pushed rents without doing much more than some paint touchup and good cleaning.  I have also seen people not be able to move rents at all, because their "upgrades" didn't go far enough.  

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  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    6mo

    @Victor Minaya:

    There is a lot that goes into this DD. But based on the info you provided key items to stress test/look into, which will likely lead to more detailed questions:

    High level thoughts:
    Your renovation budget is extremely light.  $10k/door does not get you much, and therefore can be hard to push rents.  I.e. trading old wood cabinets, for old wood cabinets with a coat of paint on them doesn't move rent much, typically.  

    You don't mention where rents are today, so you need to make sure there is adequate movement in rents to offset the renovation costs.

    Then you get to tenant demand.  What is supply looking like in area?  Does the demographics of the area support your pushed rents?  Are the "newer" apartments on waitlists, while the old ones have are sitting struggling?

    Noted above: what does the supply side look like?  Is there new construction soon to be coming online that will limit your demand for a while? 

    Financing Options: what are you borrowing at?  Are you in negative leverage until you can raise rents? 

    While I can't speak to this deal in particular, since there are a lot of missing pieces of information, the common areas these deals fail is:
    In recent years, financing structure.  Floating rate loans, specifically.  

    Unforeseen, or un-budgeted Capex, often tied to cutting capex budgets to make deal work and/or only budgeting for a 3-5 yr hold, but stuck holding 7-10 yrs. So, the buyer can't pass the buck, and needs to handle the capex.

    Knowing tenant demand.  I have seen some people over-improve units, when they could have pushed rents without doing much more than some paint touchup and good cleaning.  I have also seen people not be able to move rents at all, because their "upgrades" didn't go far enough.  

    2Reply
    • Victor Minaya
      OP
      Investor · Member since 2026 · 10 posts · 1 vote
      6mo

      @Evan Polaski 

      Evan, this is exactly the kind of feedback I was hoping to get — appreciate you taking the time to break it down like this.

      You’re 100% right on the renovation budget — the $6k–$10k/unit range came directly from the property manager, and it reflects more of a “light touch” approach vs a full reposition. That said, I agree it raises the question of whether the rent delta is strong enough to justify it.

      Current rents vs. projected rents is something I’m digging deeper into now. Based on initial data and CoStar reports, renovated units in the area are trending toward ~$1,600+, with some comps pushing closer to $1,800 for 3BRs — but I still need to validate how achievable that really is without a heavier renovation scope.

      On the demand side, I’m actively looking into supply constraints and upcoming deliveries to better understand whether the market can absorb those rent increases, or if we’d be capped.

      Financing-wise, I’ve been underwriting conservatively assuming ~65–75% LTV and ~7–8% interest, but I agree that negative leverage early on is a real risk if rent growth doesn’t materialize quickly.

      And your point on execution is huge — finding that balance between over-improving and under-improving is something I’m trying to get sharper on with each deal.

      Still working through a few of these pieces, but this is exactly the type of stress-testing that helps refine the deal.

      Out of curiosity — when you look at deals like this, what’s your typical threshold for CapEx per unit to confidently justify rent growth?

      0Reply
  • Victor Minaya
    OP
    Investor · Member since 2026 · 10 posts · 1 vote
    6mo

    Really appreciate all the feedback on this — refining the underwriting based on some great operator insights.

    0Reply
  • Frank PyleBusiness Member
    Specialist · USA · Member since 2024 · 280 posts · 130 votes
    6mo

    I would stress test the rent bump harder than anything because that whole deal lives or dies on whether 82 units in that tenant base will actually absorb 1500 to 1600 after a 6k to 10k turn. At the current NOI of about 724k, 10.9M is roughly a 6.6 cap on in place numbers, so unless debt is unusually cheap you are probably starting with thin or negative leverage and betting on execution. I would dig into loss to lease, bad debt, concessions, the real reason units went offline, and whether townhomes and apartments are being comped separately because mixed product can hide weak assumptions. I would also underwrite economic occupancy below physical, push taxes and insurance up, and make sure your renovation scope includes the boring stuff like exterior deferred maintenance, turns, and down units taking longer than planned. For me this starts getting more interesting closer to a basis where the day one yield is not fighting the debt and the exit still works with modest rent growth, so your push toward 10M makes more sense than 10.9M.

    If you want, send over your debt terms, projected post reno rents, and renovation budget per unit and I can do a quick reality check on the numbers. If you are still shaping the GP side, IEC can also help pressure test the underwriting and financing structure so the business plan matches the actual deal.

    [email protected]317-501-3467
    Frank Pyle at ExP Realty
    WebsiteView Page
    NEXA Lending- Investors Edge Concierge
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    1Reply
    • Victor Minaya
      OP
      Investor · Member since 2026 · 10 posts · 1 vote
      6mo

      @Frank Pyle 

      Appreciate this breakdown this is exactly the kind of feedback I was hoping for. I’ve been digging into a lot of those same areas, especially around rent assumptions and true economic occupancy.

      I’ll send over a snapshot of my underwriting shortly would definitely value your take on it.

      0Reply
  • Dustin MorrisPro Member
    Rental Property Investor · Salem, VA · Member since 2017 · 113 posts · 39 votes
    6mo

    @Victor Minaya


    I think I know the deal you are talking about, I’m local to the area and can offer some more insight. We invest ourselves and run a Regional property management company in Virginia. Feel free to send me a message and maybe we can connect on it further 

    2Reply
    • Victor Minaya
      OP
      Investor · Member since 2026 · 10 posts · 1 vote
      6mo

      @Dustin Morris 

      Appreciate that Dustin, that would be great. I’d definitely value your local insight on this one. I’ll shoot you a message so we can connect further.

      0Reply
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