In real estate investing, finding the perfect multifamily asset to purchase has little to do with the actual real estate. Blink blink. What? No, really. Why? This is because any particular piece of real estate is only as important (read; as valuable) as the content of its surroundings. Finding the perfect asset begins with quality market research.
Meaning: a specific real property asset is defined by the market dynamics represented in surrounding economic activity.
Saying a particular piece of property is perfect is like saying you have seen the perfect fastball. Even if this were true, how do you repeat it, again and again? By identifying markets with similar attributes to those surrounding your original premise (or perfect asset) adjusting, and making incremental improvement to the model.
For income property purchases the market and submarket defines the asset- other than trophy properties. This is never the other way around.
The primary service providers of multifamily market data are similar to the well known rating agencies of S&P and Moody's whereas they tend to swing in the same direction in the broader scope of trends. REIS , MPF and Axiomatics are all quality service providers. Their forecast will vary on market specifics (sometimes significantly) but they all get it right on matters of national scope. All three say multifamily will maintain it's pricing power in 2012.
Finding the perfect asset begins with quality market research. The three service provides noted above represent a really good place to start.
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Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel. For more information, visit: www.MultifamilyInsight.com