Multi-family 5+ units

6 Replies

Who currently is making the switch from 1-4 units to 5+ units. Is it harder? Did your finances change?  Let me know your thoughts.... 

I want to meet as many real estate entrepreneurs as possible! 

@Daniel Koch We went directly to commercial as the economics are better (and less inconvenience). Our finances became better the more investors we had. 

But it all depends on the niche and market you're in. Some niches and markets are just better than others. 

@Daniel Koch we invest heavily in the Pittsburgh market. here we buy single family and 20 unit apartments and everything in between. If the deal makes sense and it fits our criteria then we move on it. We dont pigeon hole ourselves to one sector. With that being said to answer your question I think the hurdles will be in the financing. Other than a few different aspects of a large building verses a small duplex a deal is a deal. for sure make absolute you know the market and that the numbers will work. I would make sure your financing is in place and talk with a few good commercial lenders before starting your search. 

@Alex Deacon thanks for the comments.  I really appreciate it.  What is a good going in cap 7-8%

@Daniel Koch a good cap is a hard question to answer. All things being equal I think 6-10% for a quality property in a good sustainable area is a very fair return. I look for the less obvious returns. Buying the property under value, buying the property which is poorly managed and under performing, buying a property that needs work and or can have some value added by changing the layout or number of units. Honestly that where you can really realize a great return is the intrinsic values that the untrained RE investors eyes cant see. 

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