Investment criteria for buying Apartment Buildings

[Matthew Shay]

I am interested to hear different investment criteria that people have for multifamily properties. I know that this is a subjective question. Some of the metrics I want to know about include cap rate, COCR, IRR, DSCR. Are you funding the deals yourself, private partners, commercial lenders? What class markets are you investing in and what class property type?

[Sam Grooms]

Originally posted by @David de Luna:

Tapping into this impressive braintrust, can someone show me what a 10 year IRR formula looks like? I am familiar with Excel, just want to make sure I build the formula correctly.,

Once you have your 10-YR Pro Forma, and your cash flow amounts for each year, you simply use the formula "=IRR(A1:K1)". A1 would be your cash outflow at acquisition, then the nine cells in B1 to J1 would be your first 9 years of cash flow. Cell K1 in this example would be your cash flow in year 10, plus cash received at closing on your exit.