Updated over 12 years ago on . Most recent reply
buying first multi-family
I am looking at my first 4 family building. Does anyone have any suggestions on what to look for? I would like to hear any horror stories you have to offer. I would like to avoid making the same mistakes and prefer to make new mistakes.
Regards
Most Popular Reply
Separate utilities.
Separate utilities.
In case you missed it... Separate utilities.
You'll pay everything that is connected to the multi unless it is metered separately apartment by apartment. Trying to bill back a heat bill even among 4 evenly split (4 x 2bed/1bath) apartments is a nightmare you do not want.
Anything with more than 1 bath per apartment will rent better than 1 bath apartments. Even is that number is 1.5 baths.
Play nice with the city. I see the city inspectors around my places (1 3-family and 1 4-family) a fair amount more than my SFH investor colleagues. The city is also your friend. If you have a history of keeping up your occupancy certificates, paperwork tends to breeze through the red tape.
From a finance perspective it works the same way as a SFH or duplex. I evaluate places on 10% vacancy and my actual rate is 3.8%. It hurts quite a bit less to have 1/4 rent checks missing than 1/1.