BOERNE San Antonio cap rate and vacancy rate

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Immanuel Sibero
Carrollton, TX · Member since 2015 · 415 posts · 371 votes
8y

@Jason Malabute

So you're analyzing residential properties??? If you referred to @Rick Pozos post above, cap rate is irrelevant in analyzing residential properties. Like many misguided investors, you can certainly calculate cap rate on residential properties (heck, I can calculate cap rate on my little girl's lemonade stand in the summer time) ... BUT it doesn't help much and it's highly misleading.

May I ask how you use cap rate in your analysis of residential properties?

Cheers... Immanuel

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  • Rick Pozos
    Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
    8y

    It depends on what you are looking at and what part of the city. Cap rates are NOT used for single family or small (under 4 units) multis. Cap rate will vary with 20 unit single owner/manager, larger 100+ corporate owned, part of town, amenities, etc. Lots of variables to look at. 

    The same goes for vacancy. You can get an average, but that does not help you when you are looking at a particular property.

    1Reply
  • Immanuel Sibero
    Carrollton, TX · Member since 2015 · 415 posts · 371 votes
    8y

    @Jason Malabute

    It is very dangerous to make a generalization like that. Forget the fact that San Antonio is a big city,  there are pockets of areas and different classes of properties that have their own cap rates, vacancy rates, etc.

    According to the latest census the average family size in the USA is 3.2. Find me ONE family in the whole USA that has exactly 3.2 persons...

    Cheers... Immanuel

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  • Jason MalabuteBusiness Member
    OP
    Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 901 votes
    8y
    Originally posted by @Immanuel Sibero:

    @Jason Malabute

    It is very dangerous to make a generalization like that. Forget the fact that San Antonio is a big city,  there are pockets of areas and different classes of properties that have their own cap rates, vacancy rates, etc.

    According to the latest census the average family size in the USA is 3.2. Find me ONE family in the whole USA that has exactly 3.2 persons...

    Cheers... Immanuel

     I agree. However, I have 6 markets. I'm trying to cut down to 2

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  • Jason Hirko
    Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    @Jason Malabute I live and invest in Boerne. I have residential and commercial investments here. The question is, what type of properties are you talking about? There's investments in Boerne where a 6 cap is great and some where a 6 cap is terrible

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  • Jason MalabuteBusiness Member
    OP
    Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 901 votes
    8y
    Originally posted by @Jason Hirko:

    @Jason Malabute I live and invest in Boerne. I have residential and commercial investments here. The question is, what type of properties are you talking about? There's investments in Boerne where a 6 cap is great and some where a 6 cap is terrible

     I am only  interested in 2-4 unit properties. Is it safe to say that the cap rate for 2-4 unit properties is 6 cap too?

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  • Immanuel Sibero
    Carrollton, TX · Member since 2015 · 415 posts · 371 votes
    8y

    @Jason Malabute

    So you're analyzing residential properties??? If you referred to @Rick Pozos post above, cap rate is irrelevant in analyzing residential properties. Like many misguided investors, you can certainly calculate cap rate on residential properties (heck, I can calculate cap rate on my little girl's lemonade stand in the summer time) ... BUT it doesn't help much and it's highly misleading.

    May I ask how you use cap rate in your analysis of residential properties?

    Cheers... Immanuel

    2Reply
  • Jason Hirko
    Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    @Jason Malabute Have you found many duplexes in Boerne? In my experience, they are few and far between and rarely hit the market, unless you're looking at new construction.

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  • Jason MalabuteBusiness Member
    OP
    Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 901 votes
    8y
    Originally posted by @Jason Hirko:

    @Jason Malabute Have you found many duplexes in Boerne? In my experience, they are few and far between and rarely hit the market, unless you're looking at new construction.

     I heard Boerne has over 200 multiunit properties ... is this not true?

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  • Jason Hirko
    Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    @Jason Malabute In the city limits, Boerne has over 15,000 residents. That is a small ratio. I've only ever seen duplexes come on the market as condos - meaning one side has different ownership from the other. 

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  • Jason MalabuteBusiness Member
    OP
    Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 901 votes
    8y
    Originally posted by @Jason Hirko:

    @Jason Malabute In the city limits, Boerne has over 15,000 residents. That is a small ratio. I've only ever seen duplexes come on the market as condos - meaning one side has different ownership from the other. 

     Thank you this is interesting. So Boerne is not rich in 2-4 unit properties because the population is so small there is not much incentive to develop much 2-4 multi units there... right?

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  • Jason Hirko
    Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    I'd make the argument that up until recently, Boerne was not considered a suburb of San Antonio, and therefore had a limited rental market until recently. All the growth has been 1 unit SFRs. Plus the city is extremely strict on MF zoning. 

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  • Jason MalabuteBusiness Member
    OP
    Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 901 votes
    8y
    Originally posted by @Jason Hirko:

    I'd make the argument that up until recently, Boerne was not considered a suburb of San Antonio, and therefore had a limited rental market until recently. All the growth has been 1 unit SFRs. Plus the city is extremely strict on MF zoning. 

     thank you so much for that tip

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