Average price per unit for multifamily properties
I understand this is a very broad question and there are a lot of things that go into the price of a multifamily property such as class of the apartment, market, NOI, size, etc. With that said, I was wondering if I could get a broad answer. What is the range one would expect to pay per unit for a multifamily property. Just curious, thanks for any input.
Most Popular Reply
Everyone should determine what their sweet spot is. What do you need to make per unit? Brandon Turner has stated that he was okay making $100 per door. I personally prefer better than that. Another standard of measure is the 2% rule. For instance if the unit costs $35,000 you would make $700 in rents. I personally prefer at least $800 in rents. So, I would pay up $40,000 per unit for $800 rents. If it passes the test, say you’d still need to dig further, but this is a good start. If the cost of the unit is more than this, it should be in good condition and/or there should be value add opportunities.