I already have 6 SFH's and have been playing the SFH game since 2002. (Seriously playing since 2012)
However, I want to make the leap to Commercial.
I have an offer approved for my first 20 unit complex. It just hit me, whoa this is huge. My brain is playing tricks on me like "What if this back fires and undoes all the progress since 2012"
Anyone made the leap and remember this space I am in now? How did you deal with it? Any advice?
Just need to connect with someone who understands.
I had an experienced team help me with my first deal including an experienced apartment owner reviewing my underwriting assumptions and an experienced GC walk the property with me to help assess the rehab costs. Also do you have a loan term sheet from a Multifamily lender? Strongly recommend you do the same, you don’t want to make any costly mis-steps.
I made the jump a couple of years ago from single family to small multi-family. The biggest surprise was on the social side. SFH rentals do not interact with each other, so each house works independently. In MFH there are noise complaints, parking issues, personalities not liking each other, each other's friends, etc to sort out. It hasn't proved to be a big deal, but periodically you get pulled into some minor drama that never happened in my SFH rentals.
MFH tenants expect a higher level of service (its like they don't own a single tool).
MFH tenants tend to be more mobile and turn over more often than SFH tenants.
One problem (pinhole plumbing leak) ends up impacting multiple customers. It can be painful trying to coordinate repairs.
Hence, most MFH are handled by Property Managers. Too much time gets spent on low value added activities.
@Jason Johnson a lot of investors after starting out with turnkeys and getting a few properties realize that at a measly few hundred of dollars of cashflow per property that you are not going to get where you want to be.
A few options that I see a lot of people go is doing the BRRR, being and LP in a syndication, or Kon preforming notes.
If this was your first property you could second guess yourself and the deal all day. You are an experienced landlord and even though there are some differences between a 20 unit and a single family, it's still a rental property and you are still an experienced landlord.
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