What do Foreclosures mean for Multi-Family Investors
If anyone like myself is interested in investing in multi-family real estate, chances are you noticed that over 45% of your marketplace is either in Foreclosure, shortsales, or REO’s. This doesn’t count the millions of others that are in 30 day defaults and likely heading that way. It makes a real estate investor curious on tenant/homeowner ratios.
Some analysts say that we should expect upward of over 8 million foreclosures this year in the United States. I myself am gearing up to purchase multi family properties and I also will also be selling quite a bit to interested investors.
The fact of the matter is that everyone is now realizing that there is a direct and obvious correlation between foreclosures and the multi-family market. Due to the staggering number of foreclosures, this in fact bodes well for multi-family:
- Millions of former homeowners are becoming tenants.
- Rental rates have stabilized in declining markets.
- Due to a larger ratio of homeowner/tenant use, rental rates have in fact increased in certain markets.
- Vacancy rates have significantly dropped.
Basically, the multi-family real estate market is improving and benefitting from the downturn of the general market. It is expected that real estate investors of multi-family will reap huge gains. Taking advantage of low acquisition prices and having higher rental performance is something that is positive in the Fort Myers real estate market at the moment. Ft. Myers provides a great opportunity in a recovering marketplace.
About a mile away from our office there is a 210 unit apartment complex. The average occupancy rate over the last 5 years I was told was 80%. Today, they have a 97% occupancy rate which qualifies for “full occupancy.”
If you are a real estate investor and are looking for multi-family investment, such as apartment complex, now is the time. We can assist in finding complexes with very reasonable terms, prices, and great capitalization rates.
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We have seen a pickup in investors looking for these properties. We have alot that are in short sales here also.
HI, I am currently trying to buy an apartment complex in Ga. Do you know of a great place to get a loan, preferably one that gives a 70% ltv without a down payment? Also, I may be interested in looking at what you have available. Thanks, Judie
Hi Judie,
Thanks for the commment. As of right now, I don’t know anyone in the world that will give a commercial loan based off of appraised value LTV. For a refinance, it is 100% do-able, but not for a purchase. The best loan I have for commercial is 80% but the better loans are 70-75 LTV. The complex must have stability and income must offset the debt service for the most part. In financing 4+ units, you will definately need to come to the table with cash these days.