On today’s show we are discussing a question that I get very frequently. So I’m not going to attribute the question to any single listener. The question is whether: A three story 30 unit apartment building with below market rent is a good purchase to reposition and increase rents up to market as a value creation play?
The theory is that the property has been mismanaged and that by making improvements to the property you can increase rents and therefore increase the value of the property.
The fact that the property has below market rents means that the building is very likely an older building. This means that the building is definitely going to be positioned as a C class building and it will be virtually impossible to position the building as anything but C class.
Host: Victor Menasce