Multifamily Cap Rate in Different Cities


#142

Boulder Creek is in the woods with no easy freeway access. Rental yield is very good on this one though.


#143

It’s actually pretty easy to get to Saratoga (Highway 9) or Los Gatos (Bear Creek Rd). I’m guessing ~25 minutes each, guaranteed no traffic, but a windy road that could be closed down in extreme weather situations. For some people it’s a very pleasant commute.


#144

This property in Tracy looks pretty interesting.

Exceptional income property located in Tracy. 7 unit property sitting on 1.07 acres zoned for MDR. 1 main house with 3 bedrooms and 1 bath. 6 units with 2 bedrooms and 1 bath. 1 vacant unit. Monthly rent gross $6,855 Attached Pro-forma Cap Rate 6.16%. Property maintained by property management. PLEASE DO NOT DISTURB TENANTS.

Asking price: 894K. From Tracy’s city website:

10.08.1380 - Purpose (MDR).
The Medium Density Residential (MDR) Zone is designed to provide for apartments, multiple-family dwellings, dwelling groups, and supporting uses and to be utilized in appropriate locations within the areas designated medium-density residential with a density range of five and nine-tenths (5.9) to twelve and no/tenths (12.0) dwelling units per gross acre by the General Plan.

It currently has 7 units on 1.07 acre. 12.0 x 1.07 = 12.84. Do city folks round up or down? If round up it can potentially have 13 units on it versus the current 7.


#145

This 4-plex in Santa Clara just closed. Near the hardware companies like Intel, Nvidia and Huawei.

Sold for 1.9M. Net income 71K. That makes for a cap rate of 3.75%.

It last sold for 720K back in 2000. That’s compound growth rate of 5.87%. Using the sale price in 1988 also comes to similar growth rate of 6.28%. So around 6%.


#146

The current cap rate is 3.75% for 1.9M. for the buyer ROI may work out 3.75+6% = 9.6% range going forward.

For the seller, the current cap rate is calculated on his investment amount 720k. Then 2017 seller cap rate is 9.76%. If we rollback rent every year 3% down, his 2000 year cap rate is 7.5% (appx deducted 21%).

For the seller, ROI works 7.5%+6% = 13.5% which is great.

IMO, mostly this sale may be 1031 exchange or step up basis inheritance sale. Other than this, I really do not see any point in selling this 4-plex.


#147

My 8 unit in South Lake Tahoe cost $660k and nets $71k…over a 10 cap and has appreciated 30% in one year…0 vacancies and rents are going up 10% a year


#148

When did you purchase this unit?


#149

July 2016… Btw an 8cap just sold last week…Another is still available. …There are plenty of opportunities in Tahoe and California. …no need to go to Texas or Vegas on a cap hunt…


#150

It is not for sale…But if a cash buyer showed up with $880k cash I might be forced to look for a 1031…My house is for sale…Just bought another one on the water.

Mine for sale is a 4/2.5, 2016sf, 1/3acre, waterfront, triple boat dock, remodeled, view of Tallac and Heavenly. …how about $888,888…


#151

It closed escrow today for 4.4M


#152

SOLD. You know those crazy 8s get me every time.