How much could you capitalize an apartment building?

[Arturo Borges]

When multifamily investors talk about 1.90X, or 1.65X equity multiple, are they basically saying that if they acquired the property for $20MM, they will sell it for $38MM, or 33MM? Or what exactly does it mean?

[Michael Le]

It's a multiple of the investor's equity not of the entire deal. So if you buy a $10M property and the required equity (down payment + rehab + closing costs, etc) is $3M, to get a 2.0x multiple you would need to sell the property at something like $14M.