Multifamily Acquisitions and Operations

When you have available units to be occupied in a property but cannot lease them out to a prospective tenant for whatever reason, this is referred to as a vacancy.

Opportunistic investments in real estate are more speculative in nature, hence the word “opportunistic”. The types of real estate projects could entail simply renovating a highly distressed as-is property, the redevelopment of an existing structure, or a brand new development.

A T-3 in real estate is an abbreviation for the “trailing 3-month” financial statements for a particular property. These financial statements will look back at all the income and expenses at the property over the last three months.

In commercial multifamily real estate investing, the breakeven occupancy is the occupancy number at which the property no longer cash flows and instead is not losing money or operating in a deficit.

The best unit mix for an apartment community does vary market to market. But as a general rule, having more 2-bedroom units than 1-bedroom and studio units will lend to a better-diversified unix mix for most apartment communities.

A rent premium is the extra amount a prospective tenant would pay for the same particular unit after it was renovated. Let’s say you made significant improvements to a property, and based on comparable properties, you could now charge $150 more for the same unit; the rent premium would be $150.

Real estate occupancy is a very simple calculation to perform, and many times can be done without a calculator. Occupancy is calculated with the following formula:

Economic occupancy in real estate is the number of units physically occupied by paying tenants or the percentage of income being collected relative to what’s scheduled to be collected.

We break down the essential roles and responsibilities of what an asset manager does in commercial real estate investing.

Learn the ins and outs of asset management, including the responsibilities of a multifamily real estate asset manager.