2nd Multifamily Purchase Planning/Prep
Howdy Y'all,
I have purchased one small house converted into a small triplex in Conroe, TX. Currently out of need myself (wife and two kids), parents, and two of my special needs brothers are doing a light remodel to the house (mostly due to age or poor construction). We are doing this in order to be better off financially as a family and start an investment portfolio. Combining four incomes and several credit scores, all while house hacking our first multi-family. Eventually that house will be refinanced and become a rental property. My wife also used to work for a property management company as the account manager, father has a MBA, and I have experience as a mechanic and technician.
My parents will be selling their previous home next year with the intent to invest the equity. I will be reaching out to a Lawyer and CPA to best set things up as a protection for our family interests going forward to big goals.
I've been watching several markets in preparation for a purchase next year. I have started the conversation with locals I know in those cities to help me target good areas and avoid bad ones. The strategy I am considering is to search for a quad-plex no older than early eighties. Preferably within 150-300k depending on the location and potential cashflow. The plan is to search for one that needs some rehab or updating, but not a full gut and replace. We will attempt to purchase with as little money in the deal as possible in order to have 3-9months of expenses saved. I plan on looking into a line of credit (potentially) for remodel funds as we go through one unit at a time.
I have been looking at several college town markets in Texas and one in Oklahoma. I have direct experience and family friends in all the markets I have been looking at. I am intending on getting a poorly managed quad-plex in the right area to redo and raise the rents a little if the market supports it. The exit strategies are a BRRRR after 1-3 years and then hold, or sell and take the earned equity to purchase an additional two quad-plexes and repeat. Long term goal is to get into large multi-family projects with time, capital, and experience.
Any recommendations on this plan?