A few suggestions:
1) Seek the advice of CCIMs (Certified Commercial Investment Members). ~1% of all agents in the US are CCIMs and ~6% of all commercial brokers are CCIM. They have demonstrated expertise not only through education requirements but also through actual transactions via a portfolio requirement.
2) You may choose to invest in a multifamily on your own, which if we assume a 25%-30% downpayment, would put you into a building worth about ~$325-400k. Alternatively, you may choose to invest your $100k in a syndication (with like-minded investors) which could put you in to a building that is worth $3-4M. One benefit is that the larger property would benefit from some economies of scale that the smaller property may not benefit from. The drawback with syndications is that you do not have complete control over decisions.
3) While conventional thought may suggest looking for multifamily properties with the highest cap rate, if we look to the definition of cap rate to provide further insight, one would find that the cap rate is nothing more than the rate required by an investor for a given income stream given the perceived risks associated with that income stream. Given that, looking for the highest cap rate also implies looking for the highest perceived investor risk. Conversely, a lower cap rate suggests a more stabilized (i.e. less risky) income stream and hence a lower required investor return.
If you have any questions on the above, feel free to contact me at (619) 813-5809.
Sep 3, 2009