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Multi-Family and Apartment Investing

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Thomas Lowe
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Deal with a few red flags

Thomas Lowe
Posted Jun 19 2021, 18:50

I'm looking at a 12 unit building in the Midwest. Cash flow is very impressive on my analysis of rent roll. However, when looking at rent roll, I noticed that 2 weeks before the property went up for sale. Rents in three of the 2 bedroom/1 bath units were increased from 650 to 850. Market rent for this area seems to be about 700-750. I'm assuming they did this just prior to sale to inflate their numbers? Is this too much of a red flag to buy the unit? If I was a tenet, I think I'd probably consider moving out if my rent was suddenly increased 25%. 

Thanks in advance for your advice!

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