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Just hit a 7.5% cap rate on a small multifamily in Cleveland and I'm still trying to figure out if that's actually good or a red flag
On one hand the numbers look solid and the area's growing but on the other hand I keep wondering if I'm just getting paid for taking on hidden deferred maintenance or vacancy risk that I haven't spotted yet - anyone else hit a number that felt too good to be true and how did you verify it?
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noran214d ago
That 7.5% might be pricing in a bad Cleveland winter you haven't seen yet.
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emma_burns964d ago
Wait, is that 7.5% like a special "I'm willing to shovel snow in exchange for lower rent" discount? Because honestly, after living through three winters here, I've started to wonder if the landlords just tack on a "hardship fee" for every day the wind chill hits negative. But hey, if they're pricing in my complete lack of survival skills, maybe I should just lean into it and ask for an even lower rate. I mean, I'd probably pay extra to avoid going outside in January, so maybe that 7.5% is the sweet spot for my own laziness.
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