Hi, I’m Chris Gardner with CTG Real Estate Services. Today I wanted to talk to you about a few things to consider when buying or investing in multifamily properties.
The first thing I want to talk about is asset criteria. Every buyer needs to know their asset criteria. This involves the class of the property you’re looking to buy, what type of property it is. In this case we’re talking multi family, but others can be looking at hotels, commercial office space, retail strip malls, etc. We also need to know your range of properties as far as what you’re willing to pay. We also need to know cap rates. Most people are investment groups—most of the buyers are—and they’re looking for a certain return on their properties, so you need to know that up front. Here at CTG, we work with all of our clients and buyers and investment groups to make sure we can narrow down and really focus in and hone in on that asset criteria, so when we send it to the people that provide those properties that we contract with, they really know what to provide for our buyers.
The second item that clients need to know is location. Just like with residential or anything else, you need to know where you want to be. You know what markets you want to be in, what city, states even. If you can narrow it down to certain parts of individual cities, that’s very, very helpful, so that way nobody’s time is wasted, and we’re providing properties that are in the locations you’re wanting to target. It’s very important to know the locations, because every location and market is different and provides different ROI. There are lots of other things that go along with knowing the location that you want to be in that ties into your investment strategy.
The last thing you need to think about is budget. One of the items with budget is you also need to know how much you can spend, so your lower and upper limit on the purchase price of a property, but especially for a lot of the value-add customers and clients, you got to keep other things in mind when it comes to budget. You’ve got to think of renovation costs, how that’s going to be offset when you raise rents after the renovations are done, and those types of things. Property management is another one. There are lots of other costs that go into investing in multi family that go above and beyond the original investment and purchase price.
Thank you for watching today. You can reach out to us at CTGrealestateservices.com and book a free consult and appointment.