On today’s episode we are talking about The 4 Classes Of Apartment Buildings

Class A

Class B

Class C

Class D

Class A

Newest and shiniest asset with modern amenities

Good Location

White collar tenants

Low cap rate (2-4%)

Good buy Preserve wealth but usually generates negative cashflow

Class B

Tenant mix of white and blue collar workers

OK location

Built within the last 20 years

Has some deferred maintenance

Cap rates (5-7%)

Good buy for appreciation

Class C

Tenant mix of blue collar workers and section 8

Building is 30 years or older

Cap rates (8_10%)

Good buy for cash flow

Class D

War zone

Building is 30 years or older

Difficult to collect rents

High crime rate

Good buy if you have a shotgun

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