Question what does it take to really attract a true investor in today's marketplace?
Specifically, here in rural North Idaho we come across a quality project here an there but it seems that due only to locational attributes, it's hard if not impossible to attract investors at typical market returns. So what does it take? Anyone have experience from small town america? What's the small town risk premium investors are looking for?
Example, let's take a traditional suburban apartment complex and put it in a tried and true suburban market like a suburb of Los Angeles (California). In good condition with a decent rental history, you can probably command a cap rate under 7% and an IRR around 15%. Take that exact same project and put it in our market, small town with limited competition but a decent history, well maintained and managed ... is it a 200 basis point discount on the cap rate, 1000 basis points on the IRR?
Sometimes, it sure seems like it!
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