- Jul 24, 2007
These are your own barriers. There are a lot of creative ways to do deals. First you should consider where to start and gain experience. I always feel that a four-plex is the best way to do this. You can usually get more aggressive financing with these smaller properties. Plus, you can use this as a springboard to jump.
I went from four-plex to a partnership that gave me about 33% of a 45 unit project. This took less than two years. After another two years we sold the property and I traded into 70% of a 52 unit project.
I'm assuming that you are talking about single family? If you are working with conventional lenders, they have formulas that they work with. If you want to continue with single family, I would suggest that you talk to @CashFlowDepot . She uses lease options which will not limit you in this fashion.just wondering if you could explain how you went from a four plex to 33% of a 45 unit project in 2 years? I've got 3 properties on the go about 700k in total up here in canada and would love to know how i can increase that amount.
Also i'd like to mention my income doesnt allow me to be able to get anymore financing on properties.
Can you recommend any books that help with negotiating terms?
Most commercial loans are based off the performance of the property, not the income of the individual. When you are borrowing large amounts of cash, the banks know your measly W2 job isn't going to cover the debt service.Also i'd like to mention my income doesnt allow me to be able to get anymore financing on properties.
Commercial agents that specialize in apartments. They have a list of names/organizations that are known buyers and sellers. You need to convince them that you are a real buyer before they will add you to the list.Instead of spending a ton on direct mail, who are the types of people that one should be networking with for apartment leads? Especially if you're more interested in those 50+ unit apartments so that you don't need to manage them yourself?
I have raised money and done deals. I had over 900 units at one time.Have you ever considering going public via REIT?
Sorry, I have not looked at this thread for a while.When you say exit the business, do you mean exit the process of repositioning apartments? In other words, you will just buy and hold these 100-200 unit buildings after they are paid off?
If not, what will you do with the cashflow? Gotta keep the money moving to keep the tax man at bay.
I have some experience with dealing with banks. Once they have a non-performing situation, they usually like to liquidate and not have anything to do with it. I have tried to negotiate temporary loans on a couple of deals but could not make anything happen.Hey SteveO, thanks again for this thread.
Have you had a lot of experience dealing with banks on their multi-units and apartment buildings?
If so how do you go about talking to them and getting deals out of them?
I like the idea of going as large as you are capable of with the funds that you have. Keep in mind that there is a learning curve though. Perhaps better to learn the first deal with a 4-plex or so.Hey @SteveO, still kickin around here? I'm looking to start investing in apartments with income from my current company. Right now I've got a whopping 15k saved for this so far. Would you suggest I continue saving and look for a bigger deal or start with a smaller property? Ideally I was thinking of starting with 8-12 units.
When I started, I looked more at the numbers. I began narrowing my focus as things progressed. The ability to understand all the dynamics of a location is very helpful.When you were looking for deals, did you only look for deals in a specific part of the town you specialized in or were you always open to investing as long as the numbers were right?
I've actually got a 4 plex I'm looking at now and everything looks great. It's in a good location it never has a problem being rented and the numbers work. But I was curious if you had a second to give it a quick glance? It would be hugely appreciated!Perhaps better to learn the first deal with a 4-plex or so.
Post the numbers.I've actually got a 4 plex I'm looking at now and everything looks great. It's in a good location it never has a problem being rented and the numbers work. But I was curious if you had a second to give it a quick glance? It would be hugely appreciated!
Very much appreciated and yes, totally understand you won't know the area etc. I am looking to do an owner occupy. They're in a great town in a good neighborhood and they've never had a problem renting. Again, I very much appreciate you taking the time. If you need additional info let me know! Thanks!Post the numbers
Make sure that you review the leases and the leasing criteria for each tenant. Sometimes a seller will move non-qualified people in because they are willing to pay more (since they cannot find another place). Be sure that they used proper channels for qualifying them.Very much appreciated and yes, totally understand you won't know the area etc. I am looking to do an owner occupy. They're in a great town in a good neighborhood and they've never had a problem renting. Again, I very much appreciate you taking the time. If you need additional info let me know! Thanks!
Asking is $220,000
Rents are $700/unit
Monthly Income- $2800
Monthly Expenses- $1843.70
- Vacancy-$140.00 (better safe than sorry I suppose!)
- Water/Sewer/Trash- $176.00
- Repairs - $196.00
- Insurance - $83.00
- Taxes - $247.00
- Mortgage - 811.70 (This will be higher if I do owner occupy. This is based on a 30 yr 4.25% that a lender quoted me)
- Other Maintenance - $190.00
Monthly Cashflow- $956.30
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