NOI?

Question

So I found a property and after running numbers I come up with just over 6% NOI, from everyones experience is this avg or below or above from what I can expect?

Brian H. · Answer

@Eric Trostle Newer single families in Weber county are currently fetching between 5-7 cap rates though you can usually get better cap rates in Ogden. If you're investing in Ogden, I think you can do better than a 6% ROI.

Ali Boone · Answer

It completely depends on the market whether or not 6% is good. In some markets I would never settle for 6%, and others I'd be stoked beyond belief if I could get 6%. Next to markets, a property's condition would make a difference to me as to whether 6% would do it. If it needed work, 6% may not hack it for me. Or if it's in a bad area so the risk is higher. All trade-offs.

Also for consideration is exactly what numbers/equation you are running to get to the 6%.

Steven Bond · Answer

@Eric Trostle why don't you send me the numbers you are running and assumptions.  I'm in Utah and would be glad to help with a quick crash course on buy and hold analysis in the Utah market.  I also have created an excel sheet I call my 'quick and dirty analyzer' that within 60 seconds I can get a gut check on nearly any property with an NOI, IRR, and cap rate output

Darlena Jones · Answer

Cardinal rule - Don't bank on a property appreciating.

Darlena Jones · Answer

Well,  unfortunately, a 6% cash-on-cash is super low too.  Walk away...

Eric Trostle · Answer

The property was built in 1984 and is located 31st street in Ogden.  Overall the unit is in great shape and would need little/no immediate work done to it.  It has some newer multi-family's going up around the corner which thought might help the value over time.

Brian H. · Answer

@Eric Trostle Doesn't sound too far off for Utah, based on the area and quality of the property. Where are you looking? What is the age and condition of the property?

Eric Trostle · Answer

Good to know thank you

Ned Carey · Answer

Well it depends on what type of property you are talking about. If it is a property that you expect well above average appreciation then, that may be OK.

Personally I wouldn't touch a property with cash flow that low.

NOI?

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