Could some one tell me impact of housing crash on multi-family real-estate?

I want to know if it is still a good investment. Would you expect pricing of multi-family to go down? Given that price depends on vacancy and NOI. Vacancy may be OK short-term since people may not have credit and/or cash for down. However, once things improve, since homes are 20-40% off, they will move out. This will happen while expenses will continue to go up with inflation.
In Buying Property - Asked by Naresh T. - Oct 18, 2008
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Answer(s)

Managing P.
Owner/Investor
Alameda, CA

It depends on the location. In the California Bay Area, rents are expected to go up VERY significantly in the next year, and financing for homes is expected to be tight for at least another year. This is a great time to buy multi-family. The only caveat is that down payments have increased. You need to come in with 35% or more down payment. NK@menlopartners.com

Oct 22, 2008
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OD F.
Broker/Agent
Frisco, TX

The effect of the housing/credit crisis depends on the type of M/F. Type A properties are effected the most due to their tenant base. The "C" properties are less effected also for the same reason. If you are looking to purchase M/F you should see larger discounts with type A properties in the next 6 months.

Oct 23, 2008
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Dan H.
Corporate Investor
Powell, OH

With more failed condo projects and single family homes flooding the rental market this will have a negative impact on Class A assets as they compete for residents. I believe that B/C properties will remain strong performers with increased occupancy and less rent concessions being offered. If you are in market to acquire multi-family, you will now be competeing with a lot less potential buyers as qualifying for a loan is a lot harder than it was even 6 months ago. Look to put at least 20% down on a property performing at an 8% Cap rate based on actual numbers.

Oct 23, 2008
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Paul S.
Broker/Agent
Shelbyville, TN

I would expect multi-family units of the B and C to be very strong in the short and long term. I am getting more calls everyday on apartment complexes. Rental houses are also doing well in our area.

Oct 23, 2008
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Carmelo H.
Broker/Agent
Irvine, CA

According to the Emerging Trends in Real Estate(r) 2009 Report From the Urban Land Institute and PricewaterhouseCoopers:
"Distress in the housing market is benefiting the apartment market, which the report lists as the number-one "buy." Moderate-income apartments in core urban markets near mass transit offer the best buy, a trend that carried over from the previous year."
http://www.marketwatch.com/news/story/commercial-real-estate-market-hit/story.aspx?guid=%7BA8E9CE8B-5D65-4A6C-BC28-7E1D7AF8AA72%7D&dist=hppr

Oct 23, 2008
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Joe V.
Owner/Investor
Plymouth, MI

All properties depend on teh location, no matter what type, but the housing crash has made multi-family a gold mine now. All these owners that are now renters need a place to go. All you need is financing. I would recomend www.commercialfinanceconsultants.com. They can get you 100% financing / 100% LTV with VERY LITTLE out of pocket. They have a great way to spend as little as $5000 out of pocket and work that, using their non-signatory business lines of credit and structured financing, into 100% financing quickly.

Nov 12, 2008
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