Updated over 9 years ago on . Most recent reply
Multi-Family Conversions
Hi, I am looking to start purchasing multi-family properties in and around downtown Lincoln, NE and am looking for some feedback from people who have owned similar properties in the area. I plan on managing these properties myself but have a short list of electricians, plumbers, and one handy man for small fixes. Here is my pros/cons list:
Pros: High ROI (12-15% cap rate), high demand for housing, low unemployment, depreciated/buyers market
Cons: Buildings are typically over 100+ years old, lower income tenants, newer apartment projects beginning near Nebraska University, not great outlook for properties to appreciate in value
-Will maintenance be an absolute nightmare? I am predicting 15-20% of gross. What is the downside to a conversion vs. true build? Thanks for everyones feedback.
Most Popular Reply
Multifamily conversions all have the same cons: electrical and gas workings and meters are difficult to maintain. They are cheap to buy and hard to sell. I have some, but would rather own buildings designed and built as multifamily.