Thursday, February 25, 2010

GRM 13.8



GRM is gross rent multiplier. That means annual rent as a ratio to purchase price.

$2,200,000. That's $220,000 per apartment. Now, I prefer the other GRM, monthly, not annually. Multiply by 12 is all. That's 165. In other words in this market 40% overpriced for a recovery. 60% overpriced for rent deflation expectations. They claim $ $13,000/mo in rent receipts. Taxes would eat the first $2000 every month. Ouch. Debt service also says 40% overpriced on a cash flow basis.

Hope springs eternal.

16 comments:

Property Flopper said...

My FIRST thought is, that's an ugly appartment building.

NoVa Sideliner said...

Who cares if it's ugly, as long as it pays. But this one, like so many others, does not pay.

I've been trying to convince my in-laws for some years to sell their rental properties while property prices are still (yes still!) too high. But they want to keep them "for the income". Oh my, what income?

The properties are competely tax-depreciated now, and after paying property taxes, insurance, and then accounting for deadbeats not paying the rent, they are currently earning no more than a typical online savings account or CD, even at today's crap CD rates.

And they endure a lot more aggro dealing with houses. The bank, for example, doesn't call in the middle of the night to say someone with no insurance ran their car into your CD and smashed it all up.

tj and the bear said...

CobraDriver,

You still hanging around out there?

Howz thingz your way?

Lex said...

By Tishman Speyer standards, this place is a bargain.

sm_landlord said...

Can I have some of they're smoking?
That building is priced as though the condo conversion was already complete.

Monica said...

Real property at least is... real. If worse comes to worse, the owner will at least have a place to live without paying rent or make some money but not too much. That is, provided that he breaks even. On the other hand, there is no guarantee that banks won't offer even lower rates for investment products or somehow make them unavailable or not worth having. After all, there were times when rates were better and this is just no longer the case. Maybe they won't even offer CDs in the future, but they won't come and take away a building from the owner unless there is an unpaid mortgage or something.

wagga said...

"Can I have some of they're smoking?"

Check with Monica.

Monica said...

I don't smoke anything.

tj and the bear said...

I don't smoke anything

Yeah, right. Anyone THAT concerned with all things Casey must be lighting up early and often.

Cobradriver said...

"CobraDriver,

You still hanging around out there?

Howz thingz your way?"

I'm still hanging out. The parents have all their units in Cape Coral rented. As an FYI...the rents are the same as 1995/1996 if you add in the property tax increases. 435/mo in 1995. Taxes increased about 60/unit/mo and rents are right at 500/mo.

You better not run a credit check.

If they hadn't sold a couple of properties at the peak and paid everything off...

Changing speeds,I have a relative deeply inside the place Rob loves to bash. Our emails over the last year have been interesting,to say the least. Depending on what shakes out over the next couple of weeks I might post up some stuff.

I would post something now but I swore secrecy. Not to mention he has enough stress wothout the added publicity.

Lots of interesting stuff hanging right now.

I'm tracking a half dozen "flips" in my zip. 2 are possible money makers,2 are small losses,3 are NFW. I stumbled across a broker who works with 4-5 banks exclusively. In December he was sitting on 2500-2700 foreclosures that hadn't been released to the MLS yet. Just for our county. He figured the dam would break May/June time frame. He actually told me to hang out until December 2010/January 2011 then get serious.

I have tried following CR's comments and it gives me a headache...


Chris


I'll give you hint that my relative lives in Sacramento and is trying to protect the taxpayer...

wagga said...

Dawg's out of touch right now, paddling out past the breakers...

Monica said...

CobraDriver, are you a relative of Casey?

Lex said...

Duh

W.C. Varones said...

Here's Casey's chance:

Germans suggest Greece should sell islands.

Rob Dawg said...

Wagga? http://www.peopleofwalmart.com/?p=40

wagga said...

! You were not the first to send it to me...

Check the trolley -> no beer = not me.