I am brand new to BP and just as new to REI. I've been on here reading as much as possible and listening to podcast over the past few days. Honestly, it all seems to be a bit much but only because I haven't really figured out the flow yet. I'll get there. Anyway, like I said earlier, I'm brand spanking new with this investing, and I've found a place that I am interested in and have no clue as to how to move forward.
My only experience with selling and buying real estate comes from buying 2 homes that my family and I have lived in and the sale of one of those. I've been listening to Brandon Turner's "The Book on Investing in Real Estate with No (and low) Money Down", and I'd like make some moves. Only thing is, I have no earthly idea what I am doing.
I have come across a place that has 5 units all of which are currently occupied which in itself was enticing enough for me to take a look. The asking price on this $135K and the rents paid total $1800/mo. I took a look at the property today and besides a few cosmetics, it looked pretty decent the only downside is I was unable to get a look at the inside of any of the units. Listing agent stated that a couple of units need paint and one may need new carpet and that current owner had updated bathrooms and windows throughout. I believe I asked some good questions but still have a feeling that there is a lot left untold because I didn't know everything to ask.
The agent says that the seller is motivated which I believe would give me some room for negotiating. The seller may also be open to Seller Financing with 10% down (still waiting to hear back on that) But my goal is to come out of pocket as little as possible. Besides, I don't have the $13.5K anyway, so I really want to get creative. So what to do?
My initial thought to get in on this deal was to free up my VA and use it to purchase the property. However because of that 5th unit, that idea is shot. So I have come to BP for a little advice.
1st and foremost, am I even looking at a good deal?
What are some important things I should know about this place to ensure its worth investing in?
What are some additional options to get the cash to make a move without having to come out of pocket?
Once I have secured the cash/funding to make a move, what next?
Thank you for reading!
This is a huge red flag. You must inspect every unit for a variety of reasons. There is no reason whatsoever that you cannot see the inside. If they won't show you, don't buy. There is a reason they don't want you to see inside.
I think it is pretty commonplace to not show the insides of units on multifamily's until there is an accepted offer. You make the offer subject to inspection and then you can take a look around. Trying to coordinate showing times with 5 different families for many buyers would be a huge headache.
These kind of deals scare me. An owner that's willing to carry the note, with only 10% down on a 5 unit. My first thought is this must be a major headache property. Why else would he take so much less from you each month?
There could be valid reasons...but just a red flag to me.
I couldn't advise taking on a 5 unit at $360/ door for your very first foray into landlording. Better to start with a single family or a duplex and live in one side.
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