multi family 5-7 units Delray Beach FL cap rate ?

Question

Hello everyone,

I'm new to the forum and new to multifamily investing.

Does anyone have perspective on the cap rate I should look for (pre and post improvements)

in a 5-7 unit apartment building, Delray Beach, FL  east of I-95

Neighborhood is a B to B-, building is wood frame with stucco and was built in 1930's, plumbing, electrical, roof and systems are updated but there is deferred maintenance for past couple of years

Hopefully this isn't too specific for the forum.

thank you very much for your perspective

Jaren Barnes · Answer

@Thomas Smith Welcome to the community!

Be sure also to set up your key word alerts for your local market, that's one of the best ways to find someone on here that could become a potential mentor.

Also this is a post I wrote with some tips on pursuing a mentor: http://www.biggerpockets.com/renewsblog/2014/04/16/finding-mentor-real-estate/ I think it may help.

Feel free to always reach out if you have any questions!

Brandon Turner · Answer

hey @Thomas Smith thanks for introducing yourself! It's great to have you here! Don't miss The BiggerPockets Podcast - they are great for learning how others are finding success.

Have you read this post yet? You might enjoy it: How to Buy a Small MultiFamily Property: A Step by Step Case Study

Oh - and be sure to set up some Keyword Alerts- especially for "Pasadena" so you'll be notified when people mention it here in the forums.

Thanks again for introducing yourself!

Dave Visaya · Answer

Hey @Thomas Smith welcome to BiggerPockets! It is great to have you and please feel free to jump in the community - there are certainly great people around here!

And oh, learn how to use BiggerPockets to grow your business by checking this quick guide: http://www.biggerpockets.com/biz

See you around!

Steve Smith · Answer

@Wayne Brooks  @Jon Holdman  checked out the area with " crimereport apps looks like a normal city around n. Federal and Atlantic area there are crimes nothing major murders or the like but did find  theft , stolen vehicles, but like everywhere a lot of sex offenders

Wayne Brooks · Answer

@Jon Holdman

There are some bad areas in there, a few blocks here and there.  Mostly within 7 blocks south of Atlantic, west of Federal.

Aly W. · Answer

I once found a web site that showed police/criminal activity per type of offense in just about every city in the US. I'll look for it and post it. We looked at properties in Hollywood, FL that didn't seem like war zones, but had very high criminal activity according to that site...and they break it down by offense - drugs, rape, assault.

You can also call the local police department directly; we did, and the officer was quite frank about the neighborhood we were looking in. I also did that when I bought my primary residence 18 years ago, and the officer was just as helpful.

Update: www.crimemapping.com

Jon Holdman · Answer

@Wayne Brooks I'm curious why you say that.  We looked in the area between I95 and Federal and between Atlantic and Linton.  Didn't seem like the best area, but didn't seem like a warzone, either.

Thomas Smith · Answer

Thank you Wayne and Bob for your insight.

Account Closed · Answer

What is the market cap rate range?

Cap rates only measure what the market is paying for NOI for a type of property in a specific market at a particular time.  The higher the cap rate the less desirable that NOI is to the market.   Lots of people here don't understand this and think it is like an interest rate.