All Forum Posts by: Account Closed

@George G. with all due respect, I don't live in the other 13 markets we own property in either.  I work at a fund that owns over 12,000 apartment units nationwide.  We are not in Houston for a reason.

Oil prices and construction pipeline of concern.  The market is still absorbing a lot of the new units brought online in 2014 - 2016.

At the recent NMHC conference I attend, Houston was designated as the "most concern" apartment market in the US.

Keep in mind, this is for large deals, typically 200 units and greater.  

And maybe I'm wrong.  Maybe in 5 years Nitya Capital will turn out to be correct and we will be wrong.  That's why it's called investing.

 Houston sucks right now for apartments.  Just FYI.

13.5% operating expenses?  Congratulations - you are officially the most efficient property manager in the history of the real estate industry!!

@Mark Updegraff did you end up pulling the trigger on the brokerage?  How is it going so far?

@Logan Turner the market is very hot, that's why.  Some investors are willing to purchase a property at a 4-5 cap thinking that with rising rents and a value add program after year 2 it is a higher cap rate.  

I'd use 35% expense ratio for newer properties (2005-2017), 40-45% for properties 1995 - 2004, 50% for properties 1980 - 1994 and 55-60% for anything older than 1980.

This assumes standard property and typically above 50 units.  It's obviously just a guideline.  You want to figure out the exact percentage for the properties you consider investing in based on the current operations and how you think you'll be able to manage.

In it's simplest form, the cap rate is the return that an investor is willing to receive if they put no debt/loan on a deal.

For example, a 6 cap would mean an investor is willing to buy that particular property for a 6% return.