Multifamily From The Curb Appeal?

When I first started investing in real estate, I was taught a very simple technique.

Drive the neighborhoods. Look for the houses where the lawn is overgrown, the gutters are falling off, the paint is peeling, and the maintenance has clearly been deferred.

The year was 2010. We were in the middle of the aftermath of the Global Financial Crisis, and hundreds of thousands of homeowners were in financial distress. Sometimes the first evidence of trouble was not in a foreclosure filing. It was visible from the street.

I think we need to start applying that same thinking to multifamily.

One of our team members recently visited a relatively new Class A apartment complex in Pflugerville, Texas. There were plenty of cars in the parking lot. This was not some abandoned property.

But the property wasn't showing like Class A.

The landscaping was neglected. Cleanliness was below what you would expect from a relatively new luxury property. There were visible signs of deferred maintenance.

The question is, what does that tell us?

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