bostonbubble.com

[Devlin]

Does anyone on here dabble in multis (2-4) units around here. Is it me or do the numbers not work except in unsafe places where your underwriting should be different anyways.

If you are in the business... What are your assumptions, are you still buying? Are you only buying properties in need of major rehabs?

Rent
Vacancy % (7%?)
Taxes
Insurance
Utilities (if not metered)
Water
Repairs (per unit)
After Tax Return.

I looked at a couple using 7% vacancy, $750 per unit in annual repairs and come up with an after tax return between $2,000 and $(2,000)

What techniques do you use when looking at multi family proformas?

I am not even considering landscaping/snow removal, management costs, long term capital improvements. Some of that can be sweat equity.

[john p]

There was a period where 2-Families worked for everyone, to rent both made money, to convert to condos made lots of money and little by gradual the only people I saw doing ok were those that were buying them cash, and even now those guys aren't buying very much.

[Devlin]

I keep thinking that prices on the 3-4 unit properties will come down a bit because there is a big difference between owning a two family and a four family. I

I can see families buying a 2 family and overpaying because it's all they can afford but I am surprised to see the 4 unit properties so high.

[Jazzman]

I have been watching this market for a while, because I believe that Boston offers a more stable rental market than many other cities. Buildings seem more purpose built, rents are high, and property prices weren't so volatile. I look at multi's a little like commercial real estate. The cap rate is important, both current and historical. If 8% is your benchmark, and it is in line with historical rates, then look for deals that offer it. If you can't find any, then prices may have more correction to come.