Has the market for apartment buildings slowed down?

[rainman11]

I`m wondering if anyone else has found the market to be very slow over the last while?

Is this because of the US recession?

I`ve been trying to sell a 63 unit apartment in Thunder Bay Ontario now for the last 18 months. Got a few bites but mostly only very low ball offers. But what scares me is that I`m not even asking very much for it. Only 35k per door, which makes it about an 8% cap. I thought for sure it would sell by now at that price.

Are others experiencing the same problems that I`ve had? With a lot of sellers but not a lot of serious buyers? I have the darn building on the ICX, Western Investor, and all over the place but still no serious offers. I wonder if there`s anything else I can do that I haven`t thought of? Are their any other REI papers or channels that I could advertise it in to get it sold?

I tried offering a 1% finders fee to find birddogs to try and find a buyer but still no luck. Maybe it`s just the market. I just hope I don`t have to wait much longer, or until the market turns around, which might take a while.

 

[EdRenkema]

QUOTE (rainman11 @ Feb 2 2010, 11:55 AM) I`m wondering if anyone else has found the market to be very slow over the last while?

Is this because of the US recession?

I`ve been trying to sell a 63 unit apartment in Thunder Bay Ontario now for the last 18 months. Got a few bites but mostly only very low ball offers. But what scares me is that I`m not even asking very much for it. Only 35k per door, which makes it about an 8% cap. I thought for sure it would sell by now at that price.

Are others experiencing the same problems that I`ve had? With a lot of sellers but not a lot of serious buyers? I have the darn building on the ICX, Western Investor, and all over the place but still no serious offers. I wonder if there`s anything else I can do that I haven`t thought of? Are their any other REI papers or channels that I could advertise it in to get it sold?

I tried offering a 1% finders fee to find birddogs to try and find a buyer but still no luck. Maybe it`s just the market. I just hope I don`t have to wait much longer, or until the market turns around, which might take a while.

Why are you selling?

 

[MarkTorgerson]

QUOTE (rainman11 @ Feb 2 2010, 11:55 AM) I`m wondering if anyone else has found the market to be very slow over the last while?

Is this because of the US recession?

I`ve been trying to sell a 63 unit apartment in Thunder Bay Ontario now for the last 18 months. Got a few bites but mostly only very low ball offers. But what scares me is that I`m not even asking very much for it. Only 35k per door, which makes it about an 8% cap. I thought for sure it would sell by now at that price.

Are others experiencing the same problems that I`ve had? With a lot of sellers but not a lot of serious buyers? I have the darn building on the ICX, Western Investor, and all over the place but still no serious offers. I wonder if there`s anything else I can do that I haven`t thought of? Are their any other REI papers or channels that I could advertise it in to get it sold?

I tried offering a 1% finders fee to find birddogs to try and find a buyer but still no luck. Maybe it`s just the market. I just hope I don`t have to wait much longer, or until the market turns around, which might take a while.


Hello

I have also been finding the market very tight in regards to apartment buildings. In my area, it has to do with a huge overbuild of cheap condos as well as the slowing down of the Alberta oil and gas industry. My vacancies are much higher than normal and there has been constant pressure for decreasing rents. It has been a difficult time but I am finding that things are starting to turn around as of late.

I also ask why you are selling? You mention that you are asking 35k per door but are only showing a 8% Cap Rate. Do you have heavy vacancies, very low rents, or high maintenance costs? Maybe all three?

Mark

 

[MonteDobson]

Also, what are the economic fundamentals like in Thunderbay?? This may be what is holding off buyers, but I don`t know because I don`t have a clue about the economy in TB.

On another note, we have been trying to buy a 12-24 suite apartment building here in Regina, SK for over 2 years and cannot find any buildings that make sense. So I would suggest the apartment building market to be very strong in many parts of Canada.

My 2 cents...

 

[Mabouer]

QUOTE (rainman11 @ Feb 2 2010, 11:55 AM) I`m wondering if anyone else has found the market to be very slow over the last while?

Is this because of the US recession?

I`ve been trying to sell a 63 unit apartment in Thunder Bay Ontario now for the last 18 months. Got a few bites but mostly only very low ball offers. But what scares me is that I`m not even asking very much for it. Only 35k per door, which makes it about an 8% cap. I thought for sure it would sell by now at that price.

Are others experiencing the same problems that I`ve had? With a lot of sellers but not a lot of serious buyers? I have the darn building on the ICX, Western Investor, and all over the place but still no serious offers. I wonder if there`s anything else I can do that I haven`t thought of? Are their any other REI papers or channels that I could advertise it in to get it sold?

I tried offering a 1% finders fee to find birddogs to try and find a buyer but still no luck. Maybe it`s just the market. I just hope I don`t have to wait much longer, or until the market turns around, which might take a while.

Are you offering a VTB??

 

[aiden1983]

QUOTE (rainman11 @ Feb 2 2010, 11:55 AM) I`m wondering if anyone else has found the market to be very slow over the last while?

Is this because of the US recession?

I`ve been trying to sell a 63 unit apartment in Thunder Bay Ontario now for the last 18 months. Got a few bites but mostly only very low ball offers. But what scares me is that I`m not even asking very much for it. Only 35k per door, which makes it about an 8% cap. I thought for sure it would sell by now at that price.

Are others experiencing the same problems that I`ve had? With a lot of sellers but not a lot of serious buyers? I have the darn building on the ICX, Western Investor, and all over the place but still no serious offers. I wonder if there`s anything else I can do that I haven`t thought of? Are their any other REI papers or channels that I could advertise it in to get it sold?

I tried offering a 1% finders fee to find birddogs to try and find a buyer but still no luck. Maybe it`s just the market. I just hope I don`t have to wait much longer, or until the market turns around, which might take a while.

I lived behind your building for years

. The building is nice but it is in Thunder Bay and that is your problem plain and simple. I looked at a building (10 doors) in TBay and it was under $30K/door and the numbers just didn`t work for me. The taxes are way high in TBay and the rents a pretty low for the most part. Also lack of appreciation in TBay is a huge issue for a $2.2 million investment for a lot of people. Good luck with the sale.

Aiden

 

[Thomas Beyer]

send me some details .. this may interest us .. or at least I can give you a view on price / CAP rates.

I see the following downside, but likely this is too negative:
a) in Ontario, with rent control and left-leaning, socialist, tenant friendly legislation
b) high taxes
c) HST coming, increasing costs that cannot be passed onto consumers/tenants
d) high heating bills (freezing cold in winter)
e) far from anywhere
f) cyclical industries
g) low house prices i.e. you can rent or buy a house for less than $1000/month
h) rough tenant base
i) low to no in-migration
j) not too diversified industry base
k) small town (less than 50,000 people) ?

What is the UPSIDE in Thunder Bay .. or what on my list is incorrect ?

 

[aiden1983]

QUOTE (ThomasBeyer @ Feb 3 2010, 02:02 PM) send me some details .. this may interest us .. or at least I can give you a view on price / CAP rates.

I see the following downside, but likely this is too negative:
a) in Ontario, with rent control and left-leaning, socialist, tenant friendly legislation
b) high taxes
c) HST coming, increasing costs that cannot be passed onto consumers/tenants
d) high heating bills (freezing cold in winter)
e) far from anywhere
f) cyclical industries
g) low house prices i.e. you can rent or buy a house for less than $1000/month
h) rough tenant base
i) low to no in-migration
j) not too diversified industry base
k) small town (less than 50,000 people) ?

What is the UPSIDE in Thunder Bay .. or what on my list is incorrect ?

-TBay is 100,000 people
-Typical rent in TBay is much lower than $1000/month closer to $700 (I lived for $450 inc utilities for an apartment that is in the same neighborhood as this building for 4 years).

Everything else you said is pretty accurate. SFH are a good deal there though.

 

[ogopogo7bc]

QUOTE (ThomasBeyer @ Feb 3 2010, 04:02 PM) send me some details .. this may interest us .. or at least I can give you a view on price / CAP rates.

I see the following downside, but likely this is too negative:
a) in Ontario, with rent control and left-leaning, socialist, tenant friendly legislation
b) high taxes
c) HST coming, increasing costs that cannot be passed onto consumers/tenants
d) high heating bills (freezing cold in winter)
e) far from anywhere
f) cyclical industries
g) low house prices i.e. you can rent or buy a house for less than $1000/month
h) rough tenant base
i) low to no in-migration
j) not too diversified industry base
k) small town (less than 50,000 people) ?

What is the UPSIDE in Thunder Bay .. or what on my list is incorrect ?


Just keep on thinking there is no upside here. The building he is talking about was bought for 19k a door(an amazing deal). And he is trying to sell without any upgrades. He also bought 4 other properties and flipped them for 7 figure profits.Ya no upside here!

 

[MarkTorgerson]

QUOTE (ogopogo7bc @ Feb 4 2010, 08:00 AM) Just keep on thinking there is no upside here. The building he is talking about was bought for 19k a door(an amazing deal). And he is trying to sell without any upgrades. He also bought 4 other properties and flipped them for 7 figure profits.Ya no upside here!


Good for him!!!
What is the upside for the BUYER not the SELLER??

 

[aiden1983]

QUOTE (ogopogo7bc @ Feb 4 2010, 08:00 AM) Just keep on thinking there is no upside here. The building he is talking about was bought for 19k a door(an amazing deal). And he is trying to sell without any upgrades. He also bought 4 other properties and flipped them for 7 figure profits.Ya no upside here!

If he bought this for 19K/door and is now asking 35K/door and has basically had 0 work done on the building then maybe he can now understand why he is having a hard time selling. Which buildings did he buy and flip for over a $1 million profit? I have many close friends (and family) in TBay that owns muti res buildings and they are worth just over a million (Most only pay <$25K/door). No idea how you could make that kind of money by flipping these buildings. That is good for him.