Posted by JT-IN on July 22, 2003 at 09:30:09:
This post is not to offer an expert opinion on mf’s, and for that you should post on the Commercial Forum… You will get lots better specific advice in that arena.
What I will mention is that in a recent lunch meeting with a commercial banker that I do business with, we were discussing the bank status and the overall economy, etc… He mentioned that their default rate is rising… and it is all attributed to investors who own multi fam properties. This is driven by the vacancy rate, which is driven by the low interest rates and the ease at which almost anyone can qualify for mtg financing. The financial climate is making homeowners out of tenants, and therefore greatly affecting the marketplace.
Think long and hard about your decision… before making the leap. BTW, the numbers on the deal you ask about aren’t stellar. If the seller unloads the property at that price, they win… IMHO. If you neter the frey, make sure you use a sharp pencil and plan on worst case contingencies… which would lead you to a better buy…
Just the way that I view things…