What would be an Realistic CAP rate and/or Price per unit for multi family properties in a tertiary market?

Areas like Redding, CA. or Medford, OR. Not many recent sales, so, not sure what the Real Estate Climate is for Multi family right now?
In Selling Property - Asked by T. F. - May 10, 2011
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Jan F.
Broker/Agent
Santa Ynez, CA

Multifamily is a hot investment - interest rates are still incredible - prices are soft - rents are low and projected to increase on average 4% per year. No better time than now to acquire a property and take advantage of buying low! A cap rate in a tertiary market - a market where there is not only room to grow but a local government which doesn't make it next to impossible to build, should be between 8%-10%.

May 11, 2011
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Tai N.
Broker/Agent
City Of Industry, CA

T.F., Jan is right, multi-family is the most favored of the four major food groups of commercial real estate (generally speaking). Financing is more readily available when compared to the other asset types as well. When you are talking about local markets like Redding, CA or Medford, OR, I would encourage you to seek the advice of a commercial real estate professional. Additionally Cap Rates and/or price per unit should only be a part of your decision to acquire, it boils down to what your investment goals are? Short term hold/flip, long term hold, etc.. Before you do anything, first you must determine how involved you want to be with the investment, that will help with your Cap Rate as well. On the flipside, if you are an owner, then again I would encourage you to speak with a commercial real estate professional in your market. I hope this helps.

May 26, 2011
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