Would love any advice on my first Multifamily Purchase.

Question

Greetings family

After months of fighting tooth and nail and so many dead ends. I found a Credit Union who funded a 250k HELOC on a NOO property in Cali at 75LTV...these things are like Unicorn relics in this current market.

I have several SFH rentals but never ventured into anything else. Im really looking for a solid deal on a double digit unit multifamily that cashflows after paying my HELOC, Loan, and associated expenses.

It almost appears as if the deals dried along with the funding, right when I got funding...finally. appreciate any and all help with properties, brokers, advice, etc. Also shopping in the Chicago and ILLinois area, however open to out of state.

Christopher Hunter · Answer

I'm stationed in Great Lakes as a drill instructor in the Navy, so I prefer to get eyes on my investment properties. If I was moving major volume, I probably wouldn't care, but when my next big move consumes all my funding, I just want to have a better warm and fuzzy with the deal I'm buying. Also Illinois seems to have the most supply of all brick multifamily units which I think is a plus. Mostly in the lower income housing districts, but if the cap/NOI is good, I'm ready. Does it cash flow, is their potential to grow the rents, is the market there up and coming, if so and the price is right....I want it.

Jonathan Klemm · Answer

Hey @Christopher Hunter - If you are looking for a distressed multi-family in the Chicago area, we can definitely help on all sides.

I personally love Chicago for two reasons.  1.  Plethora of distressed multi-family properties  2.  Purchase price points across the board

Feel free to reach out to see how we might be able to work together.

From @Chris Winslow post, retagging @John Warren

Edgar Barbosa · Answer

Understood. Thank you for your service @Christopher Hunter  I’m a Marine Corps veteran. Did an active tour and also some reserve time with 3rd CAG in Great Lakes. I love the multi family housing stock in IL, especially in Chicago. There’s plenty of historic architecture that for the right price will be greatly appreciated renovated. Have you considered single family rentals for active military? Let’s connect and hopefully find you something within that range of criteria.

Christopher Hunter · Answer

Would love to get more information when you have the chance, or speak to you or someone on your team.

Chris Winslow · Answer

Hi @christopher hunter, connect with @john warren for investments in the Chicago area, awesome realtor and investor

Martin Vehlow · Answer

Christopher,

Most of what I'm seeing in this market are trading at prices where cashflow is little to non-existent. The only play seems to be value-add opportunities where you can increase the rents by rehabbing the units, everything else is in the multifamily space is trading at prices focused on long-term appreciation, in my opinion.

Single-family home rentals here tend to still cashflow.

Disclosure: IL licensed agent with Coldwell Banker

Michael K. · Answer

@Christopher Hunter what purchase price per door are you looking for? Wasn't clear what you were saying about your HELOC, is that for a down payment? What kind of financing are you looking at?

John Warren · Answer

@Christopher Hunter when you describe larger commercial multifamily deals you are correct that you would normally go through the listing agent. If you are doing a smaller deal like a 6 unit or something on the MLS, then you can often times bring in your buyer's agent. I do a decent amount of those smaller 6 unit type commercial deals as they are more tweener deals.

BTW your area on the base will lend itself mostly to C class markets like Waukegan. I grew up in that area and worked on the base for a year. I think Waukegan is a great market if you are hands on.

Steven Foster Wilson · Answer

Just sent you a message.

Paul De Luca · Answer

Connect with some commercial agents to talk about commissions but from what I've seen usually the seller pays the commissions for the listing agent and buyer's agent.

If the seller pays the commissions it would be silly for you NOT to use a realtor. A good agent will act as a valuable advisor and help you get a better deal.

Would love any advice on my first Multifamily Purchase.

Most Popular Reply