How are the markets for multi-family in Virginia

Question

Hi - I am an investor in Northern Virginia and own a number of properties here. I am looking to expand into multi-family but have found that there are not a lot of opportunities to purchase that type of asset in this area. So I have decided to look further out in places like Richmond or even the Virginia Beach area. Does anyone out there have expertise in the multi-family space out there? Or are there other areas in Virginia worth considering? I am looking to purchase in the $2 million range and expect to hire a property manager for the property. Thanks!

Russell Brazil · Answer

Multifamily housing is almost non-existant in Northern Virginia. I think something like 11 properties traded in the last 2 years. Ive gone down to the Hampton Roads area to view multi's down there, but I did not care for the properties I saw

Young Moon · Answer

Thanks Chase! Very helpful info. I have been to Richmond a few times (used to work at Capital One for about 10 years). Wouldn't mind investing there. Will definitely reach out the next time I am there so we can meet.

Chase Schmidt · Answer

@Young Moon - Multi-Family properties in Richmond are varied in quality. There is a lot of B and C class buildings and most will require some rehabbing to get into rentable condition; however, once they are ready you can easily fill them with students.

One of the challenges I've seen is the cost is high and can make it difficult to cash flow at the end of the day. This is due to a few factors, one is the college (VCU) students have their parents come in and buy up the Duplex’s and Triplexes paying too much and driving up the price. This then flows into the 5+ units and owners price their properties at low cap rates expecting to get the higher price per door that the smaller properties are getting. That being said, I have been able to use the numbers to explain the real value of a property and with some success negotiated a reasonable price.

If you’re ever in the area and want to meetup let me know.

Russell Brazil · Answer

@Young Moon I actually wrote a blog post on the DC areas lack of multi family housing. I get about 10 calls a month from prospective clients asking me to help them find some. There are a few in the district...but nothing like we find in other northeastern cities like NYC, Boston, Philly.

https://www.biggerpockets.com/blogs/7527/47977-the-lack-of-multifamily-housing-in-the-dc-metro-area

Young Moon · Answer

Thanks Russell - appreciate the insight. It is frustrating that there is so little multi-family up here.

How are the markets for multi-family in Virginia

How are the markets for multi-family in Virginia

Most Popular Reply

5 Replies