Maybe. Probably. Depends. Hi. its Charles Blumenkehl, and I'll share with you some of what I've leared these last 30 years in the real estate property management business'
Maybe, because prices are definitely low, particularly if you factor the return based on anticipated rents, and buildings are selling, or at least opportunities exist, for buildings at the lowest multiples seen in decades. Factor in the low interest rates you could finance these at today, leading to higher cap rates, and thats where the Probably bomes in. On the other side of maybe is what if, in the short term more multi families hit the market, due in part to the naturing process of the foreclosure process, more investors buy more multi family homes, and a surplus of rental inventory exists. Now, you are saddled with vacancies, carry, and buildings whose value is still contracting. Well, it could be. That's where the Depends comes in. You want to make sure, particularly if you are buying non-performing notes collateralized by these properties, that these numbers are factored into your model. It's been said you can't pick the lows of the lows and the fighs of the highs of the stock market, and the dame can be said for the real etate market. Also, you want to make fure you are fincnced yourself, that if your building hits a bump in the road, larger vacancies, smaller rents, more or unforseen events or mailtenance items (there's a reason the priorowner went belly up). At Blumenkehl companies, we expect the unforseen, and it has served us well.