Newbie needs help with 12 unit

[Austin Sluder]

I am looking at a 12 unit for 550,000, my question is should I try to find a lender for the entire purchase price, or just for the down payment? I haven't secured any loans from anyone before so I'm not sure if I should try to get the lower rate on the majority of the price and hard money on the down payment? I wasn't sure on how much the insurance would be but I plugged in the rest of the numbers that I got from the agent and its showing it cash flowing $2300 after expenses and then I would have to figure out the cost of the down payment but I'm thinking it would still cashflow $1000 easily after that expense. Is that a good enough return on that big of an investment? I can send you the pdf of the numbers I ran if you'd be interested.

[Nick B.]

A first position lender (the one that provides 75% loan) would not likely loan you money if you don't have "skin in the game", i.e. down-payment. You may raise that money from investors in form of equity.

As for underwriting, I can recommend a great book that explains it all. "Buying and Selling Apartment Buildings" by Steve Burgess.