Where should I buy a multi-family for $1.6M?

Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes

Hi,

I am a property investor in New Zealand with a portfolio of mainly small multi-families.

I will be selling off some of my individual units in about a year's time which should give me approx US$640k.

As I have learned essentially all my property investing knowledge from the BiggerPockets podcast I can't help but come back to the idea of multi-family investing in the US. We don't have anything like that asset class here in NZ, 12 units are about as large as you can get. Even that is uncommon.

I've spoken to lenders in the states and I can only borrow 60% as a foreign investor. This gives me about $1.6 million to play with.

I have no ties to any particular state and a year to do my research. I imagine I can narrow it down to an amazing deal within that time.

Where should I buy? How big?

I'm looking for a classic value add, well cash-flowing property, that I can eventually refinance out a decent chunk of my capital while retaining a sizable cash flow.

Any and all advice would be welcome. I need to find a full team over there that I can lean on. I'm really hoping to develop long-lasting professional relationships in order to establish myself as an international property investor.

Thanks in advance

Ryan

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Steven Foster Wilson

Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes

Quote from @Ryan Spearman:

Hi,

I am a property investor in New Zealand with a portfolio of mainly small multi-families.

I will be selling off some of my individual units in about a year's time which should give me approx US$640k.

I've spoken to lenders in the states and I can only borrow 60% as a foreign investor. This gives me about $1.6 million to play with.

I have no ties to any particular state and a year to do my research. I imagine I can narrow it down to an amazing deal within that time.

Where should I buy? How big?

I'm looking for a classic value add, well cash-flowing property, that I can eventually refinance out a decent chunk of my capital while retaining a sizable cash flow.

Thanks in advance

Ryan

Looking for cashflow? Look into Cleveland, its got good cashflow potential with appreciation happening as well.

Looking for appreciation come to Columbus, there are still 1% deals, but the more attractive part is the population growth and other economic drivers!

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Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
3y
Generally speaking we look for growing populations, growing jobs, friendly landlord-tenant laws, and diverse economies to start with. Those criteria eliminate the West coast states & many east coast states as well. Many investors have flocked to the "Sunbelt" in recent years.
Having worked with many non-Americans over the years, I'd say the most common misconception about the States is how ridiculously big the country is. It's huge. Most non-Americans underestimate how vast the country is. Just bear that in mind as you look at different markets and when you plan your DD trips.
2 Reply
Brent Sweet
Investor · Willard, MO · Member since 2022 · 25 posts · 22 votes
3y
I'd vote Austin, Texas but that is just an opinion not backed by any solid research. It's just an area I see continuing to bring in good jobs that I think will be growing for a long time to come.
3 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Taylor L.:

Generally speaking we look for growing populations, growing jobs, friendly landlord-tenant laws, and diverse economies to start with. Those criteria eliminate the West coast states & many east coast states as well. Many investors have flocked to the "Sunbelt" in recent years.
Having worked with many non-Americans over the years, I'd say the most common misconception about the States is how ridiculously big the country is. It's huge. Most non-Americans underestimate how vast the country is. Just bear that in mind as you look at different markets and when you plan your DD trips.

Haha yes indeed. As the resident of a very small country, with a very small residential property market, the US market and the opportunities in it is mind boggling. Hence the research before I jump in.
I appreciate the sun belt advice, that’s great.
It is actually a liberating position to be in to be able to start with finding a market that suits and working my way down to finding a specific deal
1 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Brent Sweet:

I'd vote Austin, Texas but that is just an opinion not backed by any solid research. It's just an area I see continuing to bring in good jobs that I think will be growing for a long time to come.

Thanks Brent, I’ll dig into that further
1 Reply
Stephanie P.Pro Member
Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
3y
Quote from @Ryan Spearman:

Hi,
I am a property investor in New Zealand with a portfolio of mainly small multi-families.
I will be selling off some of my individual units in about a year's time which should give me approx US$640k.
As I have learned essentially all my property investing knowledge from the BiggerPockets podcast I can't help but come back to the idea of multi-family investing in the US. We don't have anything like that asset class here in NZ, 12 units are about as large as you can get. Even that is uncommon.
I've spoken to lenders in the states and I can only borrow 60% as a foreign investor. This gives me about $1.6 million to play with.
I have no ties to any particular state and a year to do my research. I imagine I can narrow it down to an amazing deal within that time.
Where should I buy? How big?
I'm looking for a classic value add, well cash-flowing property, that I can eventually refinance out a decent chunk of my capital while retaining a sizable cash flow.
Any and all advice would be welcome. I need to find a full team over there that I can lean on. I'm really hoping to develop long-lasting professional relationships in order to establish myself as an international property investor.
Thanks in advance
Ryan

You should absolutely look at secondary markets like Kansas City, MO, Pittsburgh, PA, Ocala, FL. You should absolutely stay away from markets like LA, New York, DC, Boston and Miami.
One girl's opinion.
Stephanie
1 Reply
Jack Seiden
Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 654 votes
3y
Quote from @Ryan Spearman:

Hi,
I am a property investor in New Zealand with a portfolio of mainly small multi-families.
I will be selling off some of my individual units in about a year's time which should give me approx US$640k.
As I have learned essentially all my property investing knowledge from the BiggerPockets podcast I can't help but come back to the idea of multi-family investing in the US. We don't have anything like that asset class here in NZ, 12 units are about as large as you can get. Even that is uncommon.
I've spoken to lenders in the states and I can only borrow 60% as a foreign investor. This gives me about $1.6 million to play with.
I have no ties to any particular state and a year to do my research. I imagine I can narrow it down to an amazing deal within that time.
Where should I buy? How big?
I'm looking for a classic value add, well cash-flowing property, that I can eventually refinance out a decent chunk of my capital while retaining a sizable cash flow.
Any and all advice would be welcome. I need to find a full team over there that I can lean on. I'm really hoping to develop long-lasting professional relationships in order to establish myself as an international property investor.
Thanks in advance
Ryan
It really depends on your goals, if you are looking for more cash flow and slightly more elevated risk, go for markets like Baltimore,Pittsburgh and other Midwest/rust belt cities. However if you want lower risk/higher appreciation and are willing to give up some cash flow, you will want to look into more east coast markets like D.C. Boston etc.
1 Reply
Phommala Songkhors
Flipper/Rehabber · Cape Cod, MA · Member since 2018 · 73 posts · 17 votes
3y
Red - landlord friendly states, not to get political, but its in our best interest.
100+ units. The more units the better, you can use your 1.6 M as a downpayment, Creative is the way to go !
2 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Phommala Songkhors:

Red - landlord friendly states, not to get political, but its in our best interest.
100+ units. The more units the better, you can use your 1.6 M as a downpayment, Creative is the way to go !
I’d love to have a $1.6m down payment but 1.6 would be total purchase price. I’m aiming to have $640k as down payment.
$1.6m down payment on the next one!
0 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Stephanie P.:

Quote from @Ryan Spearman:

Hi,
I am a property investor in New Zealand with a portfolio of mainly small multi-families.
I will be selling off some of my individual units in about a year's time which should give me approx US$640k.
As I have learned essentially all my property investing knowledge from the BiggerPockets podcast I can't help but come back to the idea of multi-family investing in the US. We don't have anything like that asset class here in NZ, 12 units are about as large as you can get. Even that is uncommon.
I've spoken to lenders in the states and I can only borrow 60% as a foreign investor. This gives me about $1.6 million to play with.
I have no ties to any particular state and a year to do my research. I imagine I can narrow it down to an amazing deal within that time.
Where should I buy? How big?
I'm looking for a classic value add, well cash-flowing property, that I can eventually refinance out a decent chunk of my capital while retaining a sizable cash flow.
Any and all advice would be welcome. I need to find a full team over there that I can lean on. I'm really hoping to develop long-lasting professional relationships in order to establish myself as an international property investor.
Thanks in advance
Ryan

You should absolutely look at secondary markets like Kansas City, MO, Pittsburgh, PA, Ocala, FL. You should absolutely stay away from markets like LA, New York, DC, Boston and Miami.
One girl's opinion.
Stephanie
I love this. Thanks for the straight up advice. This is what I need, a starting point to start my research from
Thanks!
0 Reply
Hadar OrkibiPro Member
Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
3y
@Ryan Spearman you need to research a market and decide what you are trying to achieve.
In the US, there are different tenant-landlord laws, and it is not like in NZ. Some states are more landlord-friendly than others. as some mentioned above.
You need to get more education and referrals in a market that meets your criteria.
I have been investing in the US for over 5 years and can tell you that it is not easy doing it from out of the country. Still, it's doable if you go all in and are willing to dedicate the time and effort to establish relationships in your chosen market. You will need to travel 2-3 times a year to gain traction or work with a solid boot on the ground or start as a passive investor in Syndication or JV.
You will also need to get proper legal and accounting advice to determine which entity would be best to own assets in the US if you are an NZ Citizen.
The key is to establish your buying criteria and learn how to find deals and underwrite them.
1 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Hadar Orkibi:

@Ryan Spearman you need to research a market and decide what you are trying to achieve.
In the US, there are different tenant-landlord laws, and it is not like in NZ. Some states are more landlord-friendly than others. as some mentioned above.
You need to get more education and referrals in a market that meets your criteria.
I have been investing in the US for over 5 years and can tell you that it is not easy doing it from out of the country. Still, it's doable if you go all in and are willing to dedicate the time and effort to establish relationships in your chosen market. You will need to travel 2-3 times a year to gain traction or work with a solid boot on the ground or start as a passive investor in Syndication or JV.
You will also need to get proper legal and accounting advice to determine which entity would be best to own assets in the US if you are an NZ Citizen.
The key is to establish your buying criteria and learn how to find deals and underwrite them.
Thanks Hadar. I appreciate it will not be easy and I’ll need some solid education, hence my length of runway.
Any suggestions of where to start educating myself and market researching? I really am keen on connecting with people I can work with on my journey
0 Reply
Liz Mole
Member since 2021 · 6 posts · 2 votes
3y
Hey, I’m Liz from NZ also, reach out, same as you started looking offshore as you just can’t get the returns in NZ to make the investments work. Best advice I got was to contact Hadar Orkibi, he’s in NZ too. I did a lot of research and he’s part of MIH (a group of go getters that invest in USA multi family). Happy to chat with you. This last year has been a blast and learnt so much. I’m in Auckland so happy to chat. Cheers, Liz
1 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Liz Mole:

Hey, I’m Liz from NZ also, reach out, same as you started looking offshore as you just can’t get the returns in NZ to make the investments work. Best advice I got was to contact Hadar Orkibi, he’s in NZ too. I did a lot of research and he’s part of MIH (a group of go getters that invest in USA multi family). Happy to chat with you. This last year has been a blast and learnt so much. I’m in Auckland so happy to chat. Cheers, Liz
Perfect! Thanks Liz. I’ll do that. I knew if I put it out there I’d come across plenty of people who could help.

I’ll dm you shortly and squeeze out as much info as I can!
1 Reply
Stephanie P.Pro Member
Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
3y
Quote from @Jack Seiden:

Quote from @Ryan Spearman:

Hi,
I am a property investor in New Zealand with a portfolio of mainly small multi-families.
I will be selling off some of my individual units in about a year's time which should give me approx US$640k.
As I have learned essentially all my property investing knowledge from the BiggerPockets podcast I can't help but come back to the idea of multi-family investing in the US. We don't have anything like that asset class here in NZ, 12 units are about as large as you can get. Even that is uncommon.
I've spoken to lenders in the states and I can only borrow 60% as a foreign investor. This gives me about $1.6 million to play with.
I have no ties to any particular state and a year to do my research. I imagine I can narrow it down to an amazing deal within that time.
Where should I buy? How big?
I'm looking for a classic value add, well cash-flowing property, that I can eventually refinance out a decent chunk of my capital while retaining a sizable cash flow.
Any and all advice would be welcome. I need to find a full team over there that I can lean on. I'm really hoping to develop long-lasting professional relationships in order to establish myself as an international property investor.
Thanks in advance
Ryan
It really depends on your goals, if you are looking for more cash flow and slightly more elevated risk, go for markets like Baltimore,Pittsburgh and other Midwest/rust belt cities. However if you want lower risk/higher appreciation and are willing to give up some cash flow, you will want to look into more east coast markets like D.C. Boston etc.

640K goes a lot farther in the secondary markets than DC or Boston. It's really difficult to see any properties cash flow without significant down payment on DSCR loans in the DC metro area, but you're right on regarding appreciation.
I saw a 4 unit in Pittsburgh with a purchase price of 340K and it was beautiful. It brought in 4400 per month. Same property in DC would be over a million, but would bring in probably 8k (if you can find one that wasn't converted to condos).
1 Reply
Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
3y
@Ryan Spearman in the US you want to pay particular attention to growth and landlord friendly states. The southeast and sunbelt is on a tear as far as growth goes and are mostly landlord friendly. People are tired of being cold and not having as much opportunity so they're leaving the northern, western and northeastern states fairly quickly. As an alternative you could also invest in a syndication and just collect checks which is a really nice way to make passive income.
[email protected]512-888-9122
The Moorhead Team5140 Reviews
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2 Reply
Drew C Grossman
Investor · Jacksonville, FL · Member since 2019 · 135 posts · 106 votes
3y
Quote from @Jordan Moorhead:

@Ryan Spearman in the US you want to pay particular attention to growth and landlord friendly states. The southeast and sunbelt is on a tear as far as growth goes and are mostly landlord friendly. People are tired of being cold and not having as much opportunity so they're leaving the northern, western and northeastern states fairly quickly. As an alternative you could also invest in a syndication and just collect checks which is a really nice way to make passive income.
Agreed, Jordan! Migration patterns within the US Pre and Post Covid have been super interested to follow. I operate in Florida for the most part and we have seen growth in the Central Part of the state where there are good returns but you still have upside with a growing area. In this market of Florida, the coast in certain parts are extremely saturated and overpopulated causuing people to move further inland.
0 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
In the Ohio markets you can get 10% net caps, very landlord friendly
1 Reply
Jack Seiden
Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 654 votes
3y
Quote from @Stephanie P.:

Quote from @Jack Seiden:

Quote from @Ryan Spearman:

Hi,
I am a property investor in New Zealand with a portfolio of mainly small multi-families.
I will be selling off some of my individual units in about a year's time which should give me approx US$640k.
As I have learned essentially all my property investing knowledge from the BiggerPockets podcast I can't help but come back to the idea of multi-family investing in the US. We don't have anything like that asset class here in NZ, 12 units are about as large as you can get. Even that is uncommon.
I've spoken to lenders in the states and I can only borrow 60% as a foreign investor. This gives me about $1.6 million to play with.
I have no ties to any particular state and a year to do my research. I imagine I can narrow it down to an amazing deal within that time.
Where should I buy? How big?
I'm looking for a classic value add, well cash-flowing property, that I can eventually refinance out a decent chunk of my capital while retaining a sizable cash flow.
Any and all advice would be welcome. I need to find a full team over there that I can lean on. I'm really hoping to develop long-lasting professional relationships in order to establish myself as an international property investor.
Thanks in advance
Ryan
It really depends on your goals, if you are looking for more cash flow and slightly more elevated risk, go for markets like Baltimore,Pittsburgh and other Midwest/rust belt cities. However if you want lower risk/higher appreciation and are willing to give up some cash flow, you will want to look into more east coast markets like D.C. Boston etc.

640K goes a lot farther in the secondary markets than DC or Boston. It's really difficult to see any properties cash flow without significant down payment on DSCR loans in the DC metro area, but you're right on regarding appreciation.
I saw a 4 unit in Pittsburgh with a purchase price of 340K and it was beautiful. It brought in 4400 per month. Same property in DC would be over a million, but would bring in probably 8k (if you can find one that wasn't converted to condos).
Yeah the rust belt are basically a bond fixed income but no upside, D.C. is more of a high growth stock low payout now more later though also the paradoxically an extremely safe place to park your money.
1 Reply
Ian Sharp
Investor · Auckland, Auckland · Member since 2015 · 3 posts · 5 votes
3y
Hi Ryan, I'm a Kiwi in the North Island and I've been investing in the US MF space for 2 years with properties in 2 States. After investing in NZ for 15 years I made the transition to the US and I'm so glad I did. For me it came down to the benefits the US has to offer then building connections and relationships over there, getting educated, adding value to others and taking action. Reach out to me for a chat if that works for you. 021888623.

2 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Ian Sharp:

Hi Ryan, I'm a Kiwi in the North Island and I've been investing in the US MF space for 2 years with properties in 2 States. After investing in NZ for 15 years I made the transition to the US and I'm so glad I did. For me it came down to the benefits the US has to offer then building connections and relationships over there, getting educated, adding value to others and taking action. Reach out to me for a chat if that works for you. 021888623.

I will! sounds like you're in the same boat as me, just a few years ahead. I'm pretty sick of the incredibly low yields here. I just want to convert some of the equity I've built up and turn it into proper cashflow
0 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Bob S.:

In the Ohio markets you can get 10% net caps, very landlord friendly

Even with today’s rates using 100% finance?
0 Reply
Account Closed
Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
3y
Is it true Australia is better than New Zealand? Somebody told me that.
0 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Account Closed:

Is it true Australia is better than New Zealand? Somebody told me that.

What’s Australia?
1 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Jack Seiden:

Quote from @Stephanie P.:

Quote from @Jack Seiden:

Quote from @Ryan Spearman:

Hi,
I am a property investor in New Zealand with a portfolio of mainly small multi-families.
I will be selling off some of my individual units in about a year's time which should give me approx US$640k.
As I have learned essentially all my property investing knowledge from the BiggerPockets podcast I can't help but come back to the idea of multi-family investing in the US. We don't have anything like that asset class here in NZ, 12 units are about as large as you can get. Even that is uncommon.
I've spoken to lenders in the states and I can only borrow 60% as a foreign investor. This gives me about $1.6 million to play with.
I have no ties to any particular state and a year to do my research. I imagine I can narrow it down to an amazing deal within that time.
Where should I buy? How big?
I'm looking for a classic value add, well cash-flowing property, that I can eventually refinance out a decent chunk of my capital while retaining a sizable cash flow.
Any and all advice would be welcome. I need to find a full team over there that I can lean on. I'm really hoping to develop long-lasting professional relationships in order to establish myself as an international property investor.
Thanks in advance
Ryan
It really depends on your goals, if you are looking for more cash flow and slightly more elevated risk, go for markets like Baltimore,Pittsburgh and other Midwest/rust belt cities. However if you want lower risk/higher appreciation and are willing to give up some cash flow, you will want to look into more east coast markets like D.C. Boston etc.

640K goes a lot farther in the secondary markets than DC or Boston. It's really difficult to see any properties cash flow without significant down payment on DSCR loans in the DC metro area, but you're right on regarding appreciation.
I saw a 4 unit in Pittsburgh with a purchase price of 340K and it was beautiful. It brought in 4400 per month. Same property in DC would be over a million, but would bring in probably 8k (if you can find one that wasn't converted to condos).
Yeah the rust belt are basically a bond fixed income but no upside, D.C. is more of a high growth stock low payout now more later though also the paradoxically an extremely safe place to park your money.

"Rust belt has no upside " You obviously have not been paying attention the last10 years. Pricing has more than doubled, tripled or more in the Cleveland markets. Forbes had Cleveland as the #1 rental market for 17 - 18, but they too were not paying attention. We used to be able to get 25- 30% or more NET caps with pricing from 30- 35k SF, and 10k per unit for MF. Now 10% net caps are to be had with pricing from 90kish, SF and 45-65k MF. per unit. Even 2021 Forbes still has the Cleveland markets in the top 5. I just recently picked up a SF 3/2 in a nice area all in 63k, values 125k, rent will be about $1350. 4 unit all in 130k, rents will be 750/ 850 per unit. 10 UNIT all in 350k, rents will be about 90k gross with a net of about 60k, 17% net ish. 4 unit all in 115k, rents will be not less than 800 each.

Its ALL about knowledge and your team

Good luck

2 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Ryan Spearman:

Quote from @Phommala Songkhors:

Red - landlord friendly states, not to get political, but its in our best interest.
100+ units. The more units the better, you can use your 1.6 M as a downpayment, Creative is the way to go !
I’d love to have a $1.6m down payment but 1.6 would be total purchase price. I’m aiming to have $640k as down payment.
$1.6m down payment on the next one!

I have been working with out of the country investors for about 10 years and have yet to find any bank that will finance them. They all say you must have a US address and bank account. So I am not sure how you are getting funding?
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