Foreclosure Field Report

You probably remember the “brass balls” post about the eight units in PB. Price was in the low to mid $900,000’s, cap rate of 9%-10%, multiplier of 10, etc, etc. Stellar deal for the beach. Added bonus is that it’s just clean title sale now, not a note sale.

Well, here is some typical pricing for multi-units in PB. Built within one year of each other, also eight units, and in North PB: $2.4 million, cap rate of 3.7%, multiplier of 19%. Almost three times the price of eight units down the street! Who cares if it’s in North PB!? The rents are almost the same!!!

The land value is not worth that much in a market where development is mostly dead: it’s all about income in relation to price. Not to mention the one HUGE thing cap rates and multipliers do not take into account: the massive appreciation you get for doing nothing on a property that you buy at deep discount. The years to come will reward you well for “buying right”. This thing on Loring is so expensive, good luck with that-not happening.

This entry was posted on Friday, July 24th, 2009 at 8:15 am and is filed under Pacific Beach. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.