Lesson 16: Multifamily Residential

October 26, 2016

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:

 

Justin

Justin Holman is CEO of Aftermarket Analytics, where he leads efforts to develop cutting edge sales forecasting and inventory optimization technology for the Automotive Aftermarket. Prior to joining Aftermarket Analytics, Justin managed corporate consulting for the Strategy & Analytics division at MapInfo Corporation, leading major projects for retail clients including The Home Depot, Darden Restaurants, Bridgestone-Firestone, Sainsbury’s and New York & Company. Before that, Justin served as Vice President of Software Development at LogicTools, now part of IBM's supply chain application software group. Justin holds a B.A. from Claremont McKenna College, a Ph.D. from the University of Oregon and an Executive Management certificate from Northwestern University's Kellogg School of Management.

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