Hi, first of all, thanks all for reading and responding! Its work to answer these posts, and we appreciate it! My husband and are researching buying(or partnering to buy--we could go either way) multifamily housing (or mobile home park or self-storage) in our "neck of the woods". But I need to know a very general idea of what the cap rates multifamily are being sold at. Not what they are listed at (that I know), but what cap rates the deals people actually get are. If that makes sense. I'm fairly certain self- storage will be a couple numbers lower-- Since its easy, and "desireable" right now. Feel free to correct me if I'm wrong. We are open to different areas, as long as they're in our corner here. I know that's only one piece to the puzzle. Also looking for a commercial agent for these areas. Thanks a million if you respond! Let me know if there's anything I can do for you! :-)
cap rates are typically in this order from lowest to highest....multifamily, self storage, mobile home parks.
MHP's and self storage used to be hand and hand when it came to cap rates, and still are very close, but as self storage development and consolidation of that industry has taken place...just MHP's are set to do over the next 5-10 years, MHP's have set themselves apart here recently, but they are getting lower and lower for on market deals.
Mulit family is typically 5-7% cap rate, self storage, 8-11% cap rates, and MHP's 9-11%. These are historical numbers and change based on what area of the country your in.
In Idaho Falls the multi family properties (like other cities I am sure) vary depending on grade and area. So new/newer properties would be 6-7 cap. Built pre 2000ish would be 8-10 cap and older or challenging properties should get 11-13%. Not a BPO just what we have typically sold them for in the past. Keep in mind that is what we SOLD them for. When I buy in IF it is a little different. For example I bought a triplex that needed rehab for 51k put 22k into it and we were able to bring in $1875/mo. With our expenses: $125 for utilities, $110 for taxes, $80 for insurance and there were a few kinks to work out in the first year so about $1200 we could call cap x but really things we didn't do in the remodel (like we had a washer/dryer stop working and I think we put in some ceiling fans). So we basically doubled the typical cap rate. To me these ones are way more fun.
I also have a property that came with 6 mobile homes, a small studio duplex and a 2bedroom house that is at about a 27 cap but it required a TON of work. Most of the units were taken down to studs and rebuilt with new wiring, plumbing, insulation, etc. Some of them were very old. And I chose to build them new since the cost of replacement was either too high if I bought a newer model or I would just end up with a slightly better one for my budget. I like to tell people that I have a "brand new" 1958 mobile home for rent.
So basically it just depends on what you are willing to do. I have owned rentals in IF for about 12 years and before that I helped with my family's rentals (at one point my dad had around 100 units). It has always been a solid market. During the recession we had a "slight droop" the nicer rentals went from around 600/mo to $525 but my lower end rentals didn't change. I live part time in southern Utah and while I do have about half of my units down here I am going to be either building or buying the next Properties in east Idaho.
I kind of rambled on there for a bit but I hope this helps. If you end up looking for anything in that area and just want someone to bounce it off of or just to tell you what to expect I would be more than happy to help out any way I can.
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