Is This A Stupid/Bad Idea?
A little history (and I know that I'll inevitably come up short providing info) - My wife and I are in our early 30s. We've been casually investing in Real Estate for about 5 years, but in January decided to get more serious about it as a business/investment plan for a lot of different reasons.
We purchased a 4 unit building in April that's performing extremely well for us, and we're currently in the process of selling our 2 SFRs to free up some capital for more small multi-family properties. We have pretty decent W2 income and very good credit scores, so it would be pretty simple for us to keep picking up another 3/4 unit building every 6-12 months or so, without touching the cashflow from our current properties. We have a pretty strict criteria about what we'll buy, and I typically want to see a COC in the twenties on solid properties in decent areas with conventional 30 year/20% down mortgages (which is obviously tough to find right now.)
BUT a deal just came up near me for 45 units - asking price is 1.65M, stated NOI is "Over $200k" (but with the variations I've seen on what some commercial brokers count as expenses, I'm waiting on more information to get really deep into this analysis. Gross rents are $350k, and it's 45 units split between 12 properties, so I'm essentially analyzing them as a bunch of small MFRs (which I'm comfortable analyzing.) It's being advertised at a 12 Cap.
Here's the dilemma: I would have to partner and borrow and finagle my brains out to get into this deal without getting crazy good seller financing terms - right? I don't have the cash for 20-25% down (plus another 10% liquid reserves.) I'm thinking I saw this deal and figured if I could work out a way to buy it that I'd essentially be reaching my REI goals for the next 5 years all in one shot.
Is it stupid to be looking at this? Should I just stick to buying small MFRs? I think realistically that's what we'll wind up doing - but I'm curious about everyone's thoughts.
Thanks all!