Ready to learn! Excited to be here! Help w/ Multifamily.
Hey everyone, so happy to be here and begin this journey to financial freedom.
I am starting out and am very new to the idea of real estate investing. I have read several guides here on Bigger Pockets and watched a webinar recently on Multifamily Homes. However when I have searched for Multifamily properties available on Zillow, the numbers don't seem to ever add up (negative cash flow always). Is this just the market right now or am I making mistakes?
My situation: In about 6 months I would like to move to the Phoenix/Scottsdale area. I will have a part time job there for 2 half days per week and am looking for a multifamily where I can potentially house hack and get an FHA loan. I am self employed but without 2 years of income sufficient for a conventional loan. My spouse however (w/ primary home in another state) has sufficient income in the $150s. I am trying to start learning how to analyze deals now, so that in the next 6 months we can pull the trigger.
Any advice is appreciated!
Thank you!
your analysis is probably right. with prices so high, most properties on the MLS don't cash flow.
i like your plan to house hack. this is a great way to get started.
if you can, make some trips out to the area and try to time it so you can go to REIAs, meet agents, go see properties, etc.
Quote from @Phi Tran:
"I want to buy a castle in Italy overlooking a private lake, but the numbers don't seem to work."
You can't buy champagne on a beer budget. Property prices are still high, interest rates are up, etc. The numbers for 2016 are no longer available. It's a fact of life we're all dealing with, so be realistic in your expectations. Consider other markets. Look harder. Find off-market deals. Partner. Save up more money. Sit it out for 6-12 months and see how the market changes. Consider a different investment (mobile home, STR, or self-storage?) that provides a better return.
@Phi Tran I have found a few that break even or slightly cash flow so keep looking! I have some other thoughts as well, if they don't cash flow are you willing to hold them until they do while hopefully getting appreciation? Are you renting out your current primary when you do this? If so, after renting out part of the multifamily, will the amount you have to cover be cheaper than your current mortgage, if so, that could be a win. If you can hold it for a few years while not cash flowing much, depending on the area, you may find greater appreciation and higher rent and it will make it all worth it. I am new to all this as well but that is the feedback I have seen on here and heard on the bp podcasts. Good luck on your investment journey!
Quote from @Michael Warthen:Hi Michael! Thanks for your input. Right now we can cover our current home's mortgage. From my understanding with an FHA, we will have to make the AZ home our primary, but she would still like to use our current home as she has a local business here.
@Phi Tran I have found a few that break even or slightly cash flow so keep looking! I have some other thoughts as well, if they don't cash flow are you willing to hold them until they do while hopefully getting appreciation? Are you renting out your current primary when you do this? If so, after renting out part of the multifamily, will the amount you have to cover be cheaper than your current mortgage, if so, that could be a win. If you can hold it for a few years while not cash flowing much, depending on the area, you may find greater appreciation and higher rent and it will make it all worth it. I am new to all this as well but that is the feedback I have seen on here and heard on the bp podcasts. Good luck on your investment journey!
I think I would be willing to "break even" on a property right now, but would of course like for it to cash flow a bit. From my understanding on here is that I just got to get my feet wet as the "first deal" you find isn't usually the best. We will see how everything turns out I guess in around 4-6 months, but I figure why not start learning now!
I think I was more concerned that I wasn't inputting numbers correctly on the calculator, because everything right now seems like a horrible deal. But perhaps this is more of a function of the entire market. I appreciate the input!