I am looking at a 9 unit rental property. 7 of the 9 units are currently renting at 450/month. The other two are vacant. The property itself is selling for 375k.
Before hitting up family and friends for capital, I'm researching if there are any no money down strategies I could use to purchase such a property.
Investor · Atlanta, GA · Member since 2020 · 62 posts · 27 votes
6y
Hi Matt,
Do you plan on having to do any rehab to these units which will bring up their overall value? If so I'd say you could look into the BRRRR strategy in conjunction with a hard money loan. Hard money lenders may let you put only 5-10% of the closing costs down and then cover the rehab costs. Once the work is done you could then do a cash out refinance and potentially get the money back that you put in up front.
Partnerships are also a potential avenue for you. Finding others that don't want to do the work of finding or analyzing properties but have capital to invest.
I'd recommend reading both Brandon Turner's book on real estate investing with low or no money down and David Greene's book on the BRRRR strategy.
Investor · Atlanta, GA · Member since 2020 · 62 posts · 27 votes
6y
Hi Matt,
Do you plan on having to do any rehab to these units which will bring up their overall value? If so I'd say you could look into the BRRRR strategy in conjunction with a hard money loan. Hard money lenders may let you put only 5-10% of the closing costs down and then cover the rehab costs. Once the work is done you could then do a cash out refinance and potentially get the money back that you put in up front.
Partnerships are also a potential avenue for you. Finding others that don't want to do the work of finding or analyzing properties but have capital to invest.
I'd recommend reading both Brandon Turner's book on real estate investing with low or no money down and David Greene's book on the BRRRR strategy.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
6y
@Matt Harmon Seller financing or bringing on a partner for the downpayment are probably the easiest ways to get in with low funds. Keep in mind however it takes a lot of money to run the business. 9 units is commercial and lot of stuff is more expensive. I have commercial properties and insurance is about $3k per yer. Flood insurance because it's near a stream is $2600. Commercial appraisal was $1600. There will also be common electric areas (hallways, outside lights) that will be in your name that may need deposits to put into your name. All of the above had to be paid in order to close on the property, in addition to the down.
Also for your cash flow calcs, most commercial is 15 or 20 year amortization, not 30.