Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
in some areas, quality 2-4 family homes are in short supply and high demand. I've been thinking of building 4-plexes to meet this demand.
What would you pay for the following new 4-plex? 4 - 3/2s in a DFW edge city in a good school district. B area. 1125 SF each. 4500 SF total, plus one car garages. Hardie board siding, granite, stainless, vinyl plank, and tile. 9 foot ceilings. Monthly rent of $1100 each. Area has @ 95% occupancy. Property eligible for FHA financing.
How much would you pay?
This is not a solicitation for investment. I'm not there, yet. Just trying to gauge price/demand.
I can't speak to your area. But I always look at the numbers on a buy and hold basis. I generally apply the 50% rule and look for 10 caps.
That being said a price of $264,000 (in my area) would make that building interesting, to me.
I'm not an appreciation investor per se, I'm looking to build a portfolio of 10 caps or better at purchase. If they appreciate that is nice, but isn't something I could/would count on, it's too speculative.
As an investor I don't put too much stock into it being "new and shiny". Income, expenses, and proper cap rate is what matters to me as an investor.
Jon all the clients I have the foreign investors especially from Canada some are willing to accept a 7 cap because with the exchange rate they are still doing well.
I find the local investors want to squeeze out more margins when buying. The problem with the foreign investors is getting financing that they like.
I think your target buyer for the highest price is a long term buy and hold landlord who makes high income but wants a new product with less headache. They are not as focused on the most cash flow but appreciation and holding for retirement etc. in a good market.
I can't speak to your area. But I always look at the numbers on a buy and hold basis. I generally apply the 50% rule and look for 10 caps.
That being said a price of $264,000 (in my area) would make that building interesting, to me.
I'm not an appreciation investor per se, I'm looking to build a portfolio of 10 caps or better at purchase. If they appreciate that is nice, but isn't something I could/would count on, it's too speculative.
As an investor I don't put too much stock into it being "new and shiny". Income, expenses, and proper cap rate is what matters to me as an investor.
