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

10 Reply

241 views

Most Popular Reply

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!

3 Reply

See this reply in the discussion

49 Replies

Jump to latestLatest

Sort by

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

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

I " set up shop " in the Cleveland markets about 10 years ago, no regrets. Well, I do regret not keeping 50 more or so of the 500 I flipped, HUGE mistake, but I am still excited about the future there
All the best
0 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Bob S.:

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?
I have spoken to a couple of lenders that will do it using my US lawyers address and a Mercury.com bank account.
The rates aren’t as nice as a regular bank and you need to put 40% down, but it’s still leverage
1 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Bob S.:

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

With those sort of numbers I would bare even need lending!
I have no problem investing in the so called “cashflow” markets with less appreciation assuming I can force appreciation enough to refinance out the bulk of my capital
0 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Ryan Spearman:

Quote from @Bob S.:

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

With those sort of numbers I would bare even need lending!
I have no problem investing in the so called “cashflow” markets with less appreciation assuming I can force appreciation enough to refinance out the bulk of my capital

This is why everyone is cash, many do refi however. Imagine if you invested about 1 mill there 10 years ago, double, triple or more, easy. On top of the 20% net cap you would have been receiving. I am involved in an 81 unit in EAST Cleveland ( I was told we were out of our minds) all in MAX 1 mill. Well over the last 7,,8 years it has been generating about 450k gross with a net of about $275k,( do the math ) and now we are turning down 3 mill. So who was crazy :) Its all about knowledge

All the best
1 Reply
Jon A.
Investor · Brooklyn, NY · Member since 2022 · 158 posts · 118 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

I can't imagine managing an apartment building from such a distance without having substantial infrastructure (i.e. lots of employees, maybe a local office). You might consider commercial properties where the landlord generally has fewer responsibility. A triple net lease.
In terms of locale, one thing I've not read about in the comments is climate change. I would not recommend buying near water or in the vicinity of a flood zone. If looking at the sunbelt, consider that those areas will have serious water shortage issues in the coming decades. Probably only the largest cities will have the capital and tax base to address that issue. And, as usual, probably only the wealthiest neighborhoods in those larger city will actually get assistance from the government.
0 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Jon A.:

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

I can't imagine managing an apartment building from such a distance without having substantial infrastructure (i.e. lots of employees, maybe a local office). You might consider commercial properties where the landlord generally has fewer responsibility. A triple net lease.
In terms of locale, one thing I've not read about in the comments is climate change. I would not recommend buying near water or in the vicinity of a flood zone. If looking at the sunbelt, consider that those areas will have serious water shortage issues in the coming decades. Probably only the largest cities will have the capital and tax base to address that issue. And, as usual, probably only the wealthiest neighborhoods in those larger city will actually get assistance from the government.

I know dozens and dozens of investors from overseas that have never even been to the city where their house is and are not involved with anything, Team handles all. Heck I only go to Cleveland twice a year, during the warm months all is handled for me.
0 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Bob S.:

Quote from @Jon A.:

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

I can't imagine managing an apartment building from such a distance without having substantial infrastructure (i.e. lots of employees, maybe a local office). You might consider commercial properties where the landlord generally has fewer responsibility. A triple net lease.
In terms of locale, one thing I've not read about in the comments is climate change. I would not recommend buying near water or in the vicinity of a flood zone. If looking at the sunbelt, consider that those areas will have serious water shortage issues in the coming decades. Probably only the largest cities will have the capital and tax base to address that issue. And, as usual, probably only the wealthiest neighborhoods in those larger city will actually get assistance from the government.

I know dozens and dozens of investors from overseas that have never even been to the city where their house is and are not involved with anything, Team handles all. Heck I only go to Cleveland twice a year, during the warm months all is handled for me.
Agree. Leverage comes in way more forms than just financial.
Most of the cities and towns I invest in in NZ I would go to less than once a year.
Any decision I need to make as the owner can be done via email. If it’s a real disaster I might actually have to talk to someone on the phone
0 Reply
Allison Dorman
Real Estate Agent · Atlanta GA burbs · Member since 2022 · 9 posts · 7 votes
3y
Quote from @Ryan Spearman:

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

I would take a look at the property taxes in the state you consider. Texas has a high property tax and as the area value goes up, so do your taxes. Just a thought as you research.
1 Reply
Jon A.
Investor · Brooklyn, NY · Member since 2022 · 158 posts · 118 votes
3y
Quote from @Ryan Spearman:

Quote from @Bob S.:

Quote from @Jon A.:

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

I can't imagine managing an apartment building from such a distance without having substantial infrastructure (i.e. lots of employees, maybe a local office). You might consider commercial properties where the landlord generally has fewer responsibility. A triple net lease.
In terms of locale, one thing I've not read about in the comments is climate change. I would not recommend buying near water or in the vicinity of a flood zone. If looking at the sunbelt, consider that those areas will have serious water shortage issues in the coming decades. Probably only the largest cities will have the capital and tax base to address that issue. And, as usual, probably only the wealthiest neighborhoods in those larger city will actually get assistance from the government.

I know dozens and dozens of investors from overseas that have never even been to the city where their house is and are not involved with anything, Team handles all. Heck I only go to Cleveland twice a year, during the warm months all is handled for me.
Agree. Leverage comes in way more forms than just financial.
Most of the cities and towns I invest in in NZ I would go to less than once a year.
Any decision I need to make as the owner can be done via email. If it’s a real disaster I might actually have to talk to someone on the phone

0 Reply
Hadar OrkibiPro Member
Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
3y
I want to insert comments on a few of the above statements.

1. Saying that "Rustbelt has no upside" is nonsense; I have many friends that invest in the "Rustbelt," and all of their deals have an upside and force appreciation. Note: some parts of the Rust Belt are areas that, In my opinion, are not Landlord friendly enough and have a high cost of living. So not my first choice to invest in.

2. @Ryan Spearman Yes, that's why I started investing in USA Multifamily 5 years ago. No cash flow in NZ unless you are buying Commercial Real Estate NNN with a higher yield. New Zealand is a tough place to invest because borrowing money is VERY DIFFICULT, and you don't get a Big Banng for your Buck.

3. 10% Net Cap is something that you need to understand. In the US @Ryan Spearman we are calculating returns differently. Especially with Multifamily, which is based on NOI. Up t about 4 Months ago, Yes, it was easy to Cashflow with 100% financing. I did two cashout refinancing over one property in the last two years, and even after pulling few hundred thousand out, the property cash flowed pretty much the same. We call it the refi and role strategy or the BRRRR.
3. A: Now that rates are 7%-8% (and going higher) High, double-digit Cashflow is harder to achieve within the first year until the property is fully stabilized.
3:B: 100% financing is Not a strategy for beginners in a correcting, volatile, trading downward market. Or with negative sentiment.
I hope that helps!
2 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Hadar Orkibi:

I want to insert comments on a few of the above statements.

1. Saying that "Rustbelt has no upside" is nonsense; I have many friends that invest in the "Rustbelt," and all of their deals have an upside and force appreciation. Note: some parts of the Rust Belt are areas that, In my opinion, are not Landlord friendly enough and have a high cost of living. So not my first choice to invest in.

2. @Ryan Spearman Yes, that's why I started investing in USA Multifamily 5 years ago. No cash flow in NZ unless you are buying Commercial Real Estate NNN with a higher yield. New Zealand is a tough place to invest because borrowing money is VERY DIFFICULT, and you don't get a Big Banng for your Buck.

3. 10% Net Cap is something that you need to understand. In the US @Ryan Spearman we are calculating returns differently. Especially with Multifamily, which is based on NOI. Up t about 4 Months ago, Yes, it was easy to Cashflow with 100% financing. I did two cashout refinancing over one property in the last two years, and even after pulling few hundred thousand out, the property cash flowed pretty much the same. We call it the refi and role strategy or the BRRRR.
3. A: Now that rates are 7%-8% (and going higher) High, double-digit Cashflow is harder to achieve within the first year until the property is fully stabilized.
3:B: 100% financing is Not a strategy for beginners in a correcting, volatile, trading downward market. Or with negative sentiment.
I hope that helps!
Thanks Hadar, lots of important information there.
I only ask about 100% financing as I now treat any investment I take on as being 100% finance. Generally any excess cash I have is a result of refinancing or at the very least could be used to pay down debt, therefore it is part of the finance of the deal
0 Reply
Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ 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

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!
3 Reply
Lien VuongBusiness Member
Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
3y
NNN commercial if you can, this removes a lot of day to day responsibilities from you and you can refinance out of the loan to get your cash out for other deals in short time once the property is stabilized. I've done this in about 6-12 months time. I would start looking at Loopnet and Crexi for opportunities.
[email protected]
The Elle Group5152 Reviews
Website View Page
0 Reply
Justin Rademacher
Real Estate Agent · Member since 2022 · 61 posts · 31 votes
3y
Minnesota is a fantastic option for what you are looking to do. My partners and I have 25 unit apartment complex we own in Rochester MN. The nice part about MN is that there is a perfect opportunity to cashflow...create some value with value add potential...and then cash out when complete. This is our current strategy with the 25 unit.
The market obviously is different from city to city but while you do your research I would look into the following:
Saint Cloud MN, Minneapolis/Saint Paul MN, and Rochester MN
2 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Justin Rademacher:

Minnesota is a fantastic option for what you are looking to do. My partners and I have 25 unit apartment complex we own in Rochester MN. The nice part about MN is that there is a perfect opportunity to cashflow...create some value with value add potential...and then cash out when complete. This is our current strategy with the 25 unit.
The market obviously is different from city to city but while you do your research I would look into the following:
Saint Cloud MN, Minneapolis/Saint Paul MN, and Rochester MN
Sounds perfect. What’s the purchase price on a 25 unit there?
0 Reply
Jared Trindade
Real Estate Agent · Fayetteville, NC · Member since 2022 · 214 posts · 293 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
As an agent that works exclusively with investors in the North Carolina Real Estate Market, I can tell you there is potential in NC. Places like Durham, and Asheville are some of the fastest appreciating communities in country, which is a great indicator of health. Places like Fayetteville and Jacksonville NC sport massive Military Populations, which are super easy to handle as tenants, and can consistently afford market rent.
Places like Raleigh and Charlotte are massive metropolitan areas, and some of the best emerging economies, with rapid growth in the nation. In truth NC has slowly been becoming a hot spot over the last few years in particular. A lot of out of state interest is heading this way.
As you know, having a full team, and a one stop shop type of setup will make management easier, and keep your headaches less. I'd love to connect if you ever have any NC questions.
Best,
Jared Trindade
1 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ 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
Howzit Ryan,
On the surface that 60% stands true although there is levels to this and many exceptions. Being a Kiwi, how you do things, entity structure is going to be really important, far more then it is the average domestic US investor.
And done correctly, that 60% limiter can get removed and you could work within the norms of leverage choice. I personally advise never to step above 80% but again, choice is a nice item to hold even if not using it.

I am a bit biased as a person of SA family, but I would suggest getting keyed into the SA's here in US, because we "get-it". We know all the various particulars of international aspect, we know NZ and US investing because we have navigated SA-US which has so many hurdles to purposefully make it as difficult as possible getting out of RAND.

There is many details, too many to get into here, but a BIG tip is look into Missouri for entity structures and pay special attention to how there laws in such relate to foreign nationals. That's a good start.

0 Reply
Justin Rademacher
Real Estate Agent · Member since 2022 · 61 posts · 31 votes
3y
Quote from @Ryan Spearman:

Quote from @Justin Rademacher:

Minnesota is a fantastic option for what you are looking to do. My partners and I have 25 unit apartment complex we own in Rochester MN. The nice part about MN is that there is a perfect opportunity to cashflow...create some value with value add potential...and then cash out when complete. This is our current strategy with the 25 unit.
The market obviously is different from city to city but while you do your research I would look into the following:
Saint Cloud MN, Minneapolis/Saint Paul MN, and Rochester MN
Sounds perfect. What’s the purchase price on a 25 unit there?

0 Reply
Justin Rademacher
Real Estate Agent · Member since 2022 · 61 posts · 31 votes
3y
our purchase price on the 25 unit was a little over 1M
0 Reply
Jared Prevost
Lender · Tampa, FL · Member since 2020 · 113 posts · 119 votes
3y
Hi @Ryan Spearman

Looks like you've got a lot of good info here, if you haven't noticed, every investor will happily point out the best parts of their particular market (it's this weird 'My market is the best market' mentality investors seems to have')
Where should I buy?
You need to establish some goals or criteria before answering this question, you can make money in every market in the US. Here are some questions I'd be asking myself:
- At the commercial multifamily level, everything SHOULD cash flow if underwritten correctly. What's more important to you, cash flow or appreciation? There is a natural tradeoff here
- Do I want to asset to be in a city or area I'd like to visit? Or do I not care personally about the location?
- Do I want to invest in a competitive market (going to be more work to find a deal) or invest in 'overlooked' markets where brokers, sellers, and agents will give me more attention?
How Big?
If you can buy up to $1.6M purchase price and renovation and want to buy a single asset, you're looking at the 8 - 26 unit range depending on the market and how distressed the asset is. I would recommend buying a single asset as you can scale operations easier and devote attention to one building.
Finding a Team
I'm going to be honest with you here, the odds of you messing up your first multifamily deal while investing from abroad is much higher than a local investing in multifamily who has done a few deals already in that market.
I would recommend finding some syndication groups you like who buy smaller deals and coming in as a $50k or $100k limited partner so you can observe and learn. Then, when you start looking for your own deals to run, you can general partner with the syndication group you've gotten to know and they can help you run the deal successfully.
0 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Jared Prevost:

Hi @Ryan Spearman

Looks like you've got a lot of good info here, if you haven't noticed, every investor will happily point out the best parts of their particular market (it's this weird 'My market is the best market' mentality investors seems to have')
Where should I buy?
You need to establish some goals or criteria before answering this question, you can make money in every market in the US. Here are some questions I'd be asking myself:
- At the commercial multifamily level, everything SHOULD cash flow if underwritten correctly. What's more important to you, cash flow or appreciation? There is a natural tradeoff here
- Do I want to asset to be in a city or area I'd like to visit? Or do I not care personally about the location?
- Do I want to invest in a competitive market (going to be more work to find a deal) or invest in 'overlooked' markets where brokers, sellers, and agents will give me more attention?
How Big?
If you can buy up to $1.6M purchase price and renovation and want to buy a single asset, you're looking at the 8 - 26 unit range depending on the market and how distressed the asset is. I would recommend buying a single asset as you can scale operations easier and devote attention to one building.
Finding a Team
I'm going to be honest with you here, the odds of you messing up your first multifamily deal while investing from abroad is much higher than a local investing in multifamily who has done a few deals already in that market.
I would recommend finding some syndication groups you like who buy smaller deals and coming in as a $50k or $100k limited partner so you can observe and learn. Then, when you start looking for your own deals to run, you can general partner with the syndication group you've gotten to know and they can help you run the deal successfully.
Thanks Jared. The team is definitely the key, and absolutely where I want to devote most of my time
1 Reply
Sara Frank
Realtor · Baltimore, MD · Member since 2020 · 255 posts · 182 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

Being out of country the biggest question you want to ask yourself is how much work you want to put into land lording. There are pros and cons to the two schools of thought: higher risk lower price assets in middle states VS low risk higher priced assets on the coasts. A third option if youre looking for true passive income could be to invest in a syndication
0 Reply
Ryan Spearman
OP
Auckland, New Zealand · Member since 2018 · 80 posts · 36 votes
3y
Quote from @Sara Frank:

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

Being out of country the biggest question you want to ask yourself is how much work you want to put into land lording. There are pros and cons to the two schools of thought: higher risk lower price assets in middle states VS low risk higher priced assets on the coasts. A third option if youre looking for true passive income could be to invest in a syndication

Thanks @Sara Frank. That’s definitely a major part of my research.
I need enough cashflow to make it worth my while, while at the same time making it smooth enough to run nicely.
It all comes back to finding a great team to manage the property well and performing a great reno at the front end to bring down maintenance throughout the first years of the assets life.
I must admit, despite already investing out of my city, the idea of investing out of the country is pretty daunting
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.