How to properly evaluate an Apartment

Question

Can anyone tell me the best way to evaluate an apartment complex? I have 4 that I am looking at and I am looking to start making some offers soon.  Besides the financials, what are some important factors that I should really look into?

Omar Ruiz · Answer

If you're buying with leverage, you absolutely need to know what your cash on cashflows return is - no exception. If you're buying all cash than the cap rate is most important.

Jeff B. · Answer

SFR or MFU, the neighborhood means a lot (remember location,location, location).

Drive by and ask Would I live here?  FMV & FMR can be greatly impacted by the surroundings.  Try to determine the demographics for the city and growth vs declining economy (jobs, rentals vs owners).  These all impact the marketability of the units.

As a buy&hold investor, I bought my 6 units based upon cash-flow.  The bank fusses with the DSCR for qualification but it  didn't do much for me.  Lots advocate cap rates, but I love the deposits every month.

Luis Orts · Answer

Gino, I've been looking for a solid analysis tool... could you share that with me as well? Thanks ahead of time!

Gino Barbaro · Answer

@George Frye

PM me.  I can share with you an analysis tool.  It is a broad question.  Look at competition, how you can add value, what the prevailing cap rates are, and what criteria do you have to prosper as far as cash on cash, dscr.

Gino