1Three listings, as published
| Building | Units | Asking | Per unit | Stated cap | Income shown | Not shown |
|---|---|---|---|---|---|---|
| A · 6402 Dewey Ave, West New York, NJ (1921) | 13 | $2,950,000 | $226,923 | 6.91% | NOI about $204,000 on rent about $280,000; "about 13%" rent upside; 100% occupied | Expenses, taxes, rents per unit |
| B · 214 Glenwood Ave, East Orange, NJ (1940) | 45 | $7,650,000 | $170,000 | 6.62% | None. "$350+ a month rent upside" | NOI, income, occupancy, rents, taxes |
| C · 1336 Arrott St, Philadelphia, PA (1945) | 112 | $10,080,000 | $90,000 | 7.34% | Scheduled income $1,376,952; rents $881 to $1,082; about 95% occupied | Expenses, taxes |
Sources 1 to 3. A cap rate is the year's net operating income divided by the price. Listing C's implied NOI is $739,872; listing B's is $506,430.
2The expense ratio is where listings go wrong
New York's Rent Guidelines Board publishes what stabilized buildings cost to run. Small buildings cost the most per dollar of rent.
| Building size | Costs as % of income (NYC, 2024) | Share losing money |
|---|---|---|
| 11 to 19 units | about 67% to 68% | 13.2% |
| 20 to 99 units | about 67% to 71% | 8.1% |
| 100 or more units | about 58% to 65% | 4.5% |
| All stabilized buildings | 63.6% | 9.2% |
The citywide row is the study's own figure. The size rows are DHI arithmetic from the study's Appendix 3 (costs and income per unit) and Appendices 7 and 9 (buildings with negative income); two readings of the appendix give the ranges shown.
| Listing A re-underwritten | Expenses | NOI | Cap rate at $2.95M |
|---|---|---|---|
| As listed | 27% of rent | $204,000 | 6.9% |
| At 40% of rent | $112,000 | $168,000 | 5.7% |
| At 45% of rent | $126,000 | $154,000 | 5.2% |
Sources 4 and 5. The 27% is derived from the listing's own NOI and rent. 40% to 45% is generous for a 1921 building with tenant-paid utilities; the city average for its size is higher. At market costs, the "6.9% cap" is a 5.2% to 5.7% cap: fairly priced.
3Will a lender fund it? The test that sets the price
Agency lenders size the loan on debt coverage. Fannie Mae's terms: up to 80% of value, net income at least 1.25 times the loan payment, and a capital reserve of at least $250 a unit a year.
| Listing C at the asking price | Amount |
|---|---|
| Loan at 80% of $10.08M | $8,064,000 |
| Yearly payment at 6.6%, 30-year amortization | $618,000 |
| NOI less $250 a unit reserve | $711,872 |
| Coverage | 1.15x, below 1.25x |
| Loan that passes 1.25x | $7,430,000 (74% of price) |
Sources 6 to 8. Small agency loans quoted 6.3% to 6.9% on October 7, 2026. On securitized apartment loans made into early 2026, cap rates sat 57 basis points below loan coupons, so the buyer's cash yield falls once debt is added.
4What distress actually clears at
| Case | Units | Debt | Sale | Per unit | Recovery |
|---|---|---|---|---|---|
| Pinnacle Group portfolio, New York City (Chapter 11, closed March 31, 2026) | ~5,200 | $564M | $451.3M | $86,800 | 80% of principal |
| MDA Apartments, Chicago (foreclosure, June 2026) | 190 | ~$69M claim | $59M | $310,500 | ~86% |
Sources 9 and 10. Listing C's $90,000 a unit is within 4% of the Pinnacle clearing price. A buyer can argue basis from that: the last forced seller got $86,800 a unit. Our read, with a caveat: Pinnacle's units are rent-regulated New York apartments and listing C's are market-rate Philadelphia units.
5Before you bid
- Get the real numbersTwelve months of actual income and expenses, the rent roll, and the tax bill. Listing B publishes a cap rate with no income behind it.
- Check rent regulationWest New York capped annual increases at 3% in April 2026; listing A's "13% upside" now needs turnover. New York City set a 0% increase for leases starting October 2026.
- Crossfoot the broker's mathListing C's own unit schedule at market rents adds to $1,452,600 a year, not the $1,477,500 claimed.
- Run the refinance testSize the loan at 1.25x coverage and today's rate. If it funds less than the seller owes, the seller's problem becomes your negotiating room.
- Reserve for capital$250 a unit a year is the floor; a 1921 or 1930 building needs more.
- Price against the forced salesPer unit, against what the lender-driven deals in the same city cleared at this year.
Sources
- LoopNet listing, 6402 Dewey Ave, West New York NJ, read Oct 7, 2026: loopnet.com/Listing/6402-Dewey-Ave
- LoopNet listing, 214 Glenwood Ave, East Orange NJ: loopnet.com/Listing/214-Glenwood-Ave
- LoopNet listing, 1336 Arrott St, Philadelphia PA: loopnet.com/Listing/1336-Arrott-St
- NYC Rent Guidelines Board, 2026 Income and Expense Study (calendar 2024 data): rentguidelinesboard.cityofnewyork.us
- CBRE U.S. Cap Rate Survey H1 2026 (New York stabilized multifamily 5.0% to 5.5%): cbre.com; range as reported by CRE Daily, Aug 14, 2026
- Fannie Mae conventional multifamily term sheet (80% LTV, 1.25x DSCR): multifamily.fanniemae.com; capital reserve floor, Multifamily Guide Part III §105.01
- Agency small-loan rates, broker rate sheet dated Oct 7, 2026: apartmentloanstore.com (not an agency source)
- CRED iQ via Commercial Observer, Apr 27, 2026 (cap rates 57 bps below coupons): commercialobserver.com
- Pinnacle (Broadway Realty) sale: weil.com; Commercial Observer, Jan 2026
- MDA Apartments foreclosure sale, Hoodline, July 2026 (secondary source): hoodline.com
- West New York Ordinance 10/26 (3% cap): westnewyorknj.org; NYC RGB Order 58 (0% for 2026-27 leases): rentguidelinesboard.cityofnewyork.us
Listing figures are the brokers' as of the date read and change without notice. Derived numbers are DHI Capital's arithmetic from the published figures. Not investment advice.
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