Lesson 16: Multifamily Residential

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October 26, 2016 at 2:08 pm  •  Posted in f16-econ491 by  •  0 Comments

Wed, Oct 26

Review:

  • Term Project Assignment

Presentation:

  • Valuation of multi-family residential
    • Price per unit
    • Gross rent multiplier
    • Cap rate
  • Advantages of multi-family
    • vs office, retail or other commercial
    • vs single-family
  • Types of multi-family
    • Duplex, Triplex, Fourplex
    • 5-units and more require “commercial” financing
  • Story of the Cree Terrace Apartments
    • Low-end rentals
    • Dealing with evictions
    • Adventures in bats, cockroaches, pets, guests and carpeting
    • Importance of “Santos and Bob”
    • Headache to revenue factor
    • Beware of the “nickel and dime” buyer while under contract
    • Lessons:
      • 1 bedroom > 2+ bedroom
      • Rent drives value and utilities are a hassle
      • Go big (10+ units) or stick w single-family

Assignment:

 

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