How are you able to create positive CF in this high interest market?

Orlando, Florida
Multi-Family and Apartment Investing
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How are you able to create positive CF in this high interest market?

Zach Jones
FL · Member since 2020 · 45 posts · 28 votes

So I'm a fan of MF investing.. I've been looking at traditional financing with 25% down (it sucks I know but I've saved and don't know of better options currently) and I've even considered going FHA at 3% IF I could find a nice quadplex locally. The main issue with both of these plans, ESPECIALLY the FHA one, is the mortgages! With non primary rates over 8%, nothing seems to be able to create any kind of decent CF. I'm running numbers on properties with 120-150k out of pocket with ROIs in the 11/12 year range because most properties are CF around a couple hundred a month. I know I could refi eventually but I disagree with ever accepting negative CF and don't want to put myself in any compromising position. That being said, I know the big players that are into both SFH and MF aren't not buying due to the rates.. atleast I assume they're not. What can I do? What are you doing? How are you able to invest in this climate and make deals make sense? Also, I live i the central Florida area where we've got duplexes selling for around 4-500k.. Let me know your thoughts! I'd greatly appreciate it. Having a very hard time keeping a positive mindset toward RE investing with the current economic state and "whats to come".

PS.. for those in my area who look at out of state investing, I'm attempting to learn more about this subject and getting over the sketchiness of never seeing a property or physically being able to handle something if necessary BUT, if you are.  Where are you looking at investing and in what class of property? Hows the CF?? 

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Zachary Ware
Member since 2022 · 405 posts · 455 votes
2y

Hey Zach,

I think a lot of us are in the same boat here, more so in some markets than others. There are still some markets where you can find cash flow out there. I am looking outside of major cities in tertiary markets. As others have said, the goal of house hacking is to pay less than you would for rent. But even then, when you move out and put a tenant in your place, you want to be making money on the property, and I have not seen many properties in my market that fit that box. With interest rates and prices where they are, there are still a few ways that you can cash flow. 

Value Add is a huge part of all RE investing. Buying at a discount, and putting in some sweat equity is a great play but can also be tough when househacking. If you want to use most of the first-time homebuyer loans the property will need to be turnkey. I would look into an FHA 203k loan if you are wanting to do renovations.

Seller financing can also be a great option if rates are too high for values. You can negotiate the rate you are paying though these deals generally take more leg work to find. You will need to be sourcing deals off the street and looking for motivated sellers. 

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Zach Jones

    OK, a lot in this post and I'm not sure what to address in one response - you asked about cash flow, investing strategies, interest rates, out of state investing, mindset...

    I want to point something out about house hacking just in case you're missing it.  Maybe you're not, but just a reminder.  The goal in house hacking isn't to cash flow positive - it's to spend less than you would renting.  Say you could rent a place for $1200 a month, or house hack and be "negative" $852 a month.  House hacking is better.  Why?  Because you're not only spending slightly less, you're also building equity every month with the mortgage paydown.

    Make sense?  

    Happy to address other items if you want to be more specific.  I would try to start out in a Florida market rather than going for a cheap property out of state that looks great on paper but isn't going to help you build wealth.

    3Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    2y

    Creative finance is how you will cash flow right now. Subject to and owner finance where you can manipulate your interest-rate is the field you should be playing in.

    3Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    2y

    I'm doing three things:

    1) Off-market deals in Detroit. It's my primary market and I have 12-doors there. It still works from a cash flow perspective with today's rates. And if you find deals off-market it's even better.

    2) Doing a value-add ADU at my primary. We're having our builder white box it and we'll do the finishes ourselves. This saves us a ton of money and we're able to create instant equity. As a result, the final rental numbers are fantastic.

    3) Doing a live-in flip. Although we don't plan to sell our primary, we intentionally bought something super dated so we could update it and force equity. We've done this before. Ultimately, we'll be able to leverage this equity for other investments.

    6Reply
  • Jim Spalding
    Investor · New York, NY · Member since 2023 · 5 posts · 2 votes
    2y

    Where are you looking? MLS have some deals but you really have to work for it - the off-market deals if you have any sort of connection would be beneficial, you can still find deals with these rates there. That being said, you can also go these routes:

    Creative Financing: as Elliott mentioned, negotiable interest rates is the fast way to ease expenses and create positive CF, along with the reduced closing cost.

    Out of state investing: you mentioned your willingness to learn more about out of state investing, now I am not too familiar with the Orlando RE market -  but I assume the influx in people flooding into Florida during the pandemic certainly raised prices across the board. You can perhaps enlighten me on the state of the Orlando markets right now, but my guess is prices are only going to continue trending up, making it harder to find value. 

    Some of your neighbouring states like Georgia and Alabama have some good value. Nicholas raises some valid concerns about the risk of a cheap property out of state, though - you have to be careful, especially in areas like Montgomery or Birmingham. 

    happy to address some more concerns and steps about out of state investing.

    0Reply
  • Benjamin AakerPro Member
    Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
    2y

    I wouldn't say that no one is buying. The wise investor has to factor the interest rate into what they can pay. Sellers have been slow to realize this and so we see offering prices impossibly high. All-cash buyers could make it work but the cash is starting to dry up. Keep evaluating deals. In the next 6 months or so, we will start to see sellers who need to sell asking for reasonable prices. The rate isn't what only matters. It's about all the numbers. When the rate goes up, the value should go down respectively.

    5Reply
  • Mason WeissBusiness Member
    Realtor · Phoenix, AZ · Member since 2021 · 523 posts · 239 votes
    2y

    Hey Zach, I understand the frustration. There are still a good amount of buyers of small multifamily because they can afford the longer time horizon with their investment. If you can't compete with the returns, then you will have to aggressively find deals direct to seller that meet your cash flow requirements. 

    I don't hate the idea of a live and flip/house hack duplex purchase in your position. Less leverage than a quad and it might get you in the game depending on your current situation. 

    [email protected]480-818-7745
    1Reply
  • Samuel L.
    Investor · Orlando, FL · Member since 2021 · 57 posts · 22 votes
    2y

    Hey @Zach Jones. 

    I've spent a lot of time analyzing the small multi-family market in Central FL and I am seeing the same thing. As you know, there are a small number of triplexes and even less quadplexes that come on the market (at least in Orange County). As far as duplexes go, you are spot on that the average price for a duplex is between 4-500k. If you buy and rent both sides, you are likely to break even give or take $200 dollars either way depending on capex and vacancy. 

    House-hacking can still make sense if the alternative is to buy and live in a similar sized single unit in the same neighborhood. For simple numbers, let's say PITI on the duplex is $3,000 and a 2/1 or 2/2 SFH might run you $2,000 PITI. Let's say you can rent one side for $1,500 then you are on the line for $1,500 a month. Even with some vacancy/repairs, your cost of living would still be a little cheaper while building equity on the principal pay down + capturing appreciation on a property worth 150k more than the SFH.

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    2y
    Quote from @Samuel L.:

    Hey @Zach Jones. 

    I've spent a lot of time analyzing the small multi-family market in Central FL and I am seeing the same thing. As you know, there are a small number of triplexes and even less quadplexes that come on the market (at least in Orange County). As far as duplexes go, you are spot on that the average price for a duplex is between 4-500k. If you buy and rent both sides, you are likely to break even give or take $200 dollars either way depending on capex and vacancy. 

    House-hacking can still make sense if the alternative is to buy and live in a similar sized single unit in the same neighborhood. For simple numbers, let's say PITI on the duplex is $3,000 and a 2/1 or 2/2 SFH might run you $2,000 PITI. Let's say you can rent one side for $1,500 then you are on the line for $1,500 a month. Even with some vacancy/repairs, your cost of living would still be a little cheaper while building equity on the principal pay down + capturing appreciation on a property worth 150k more than the SFH.

    I do not know what numbers you are using for maintenance/cap ex, vacancy, etc, but you scenario is huge cash negative if using realistic numbers.  My data matches the study that analyzes renting versus buying that shows only 3 of the largest 100 cities is it initially cheaper to own than to rent.  

    the reality is in virtually all markets MLS lurches are initially cheaper to long term rent than own and this does not change for house hackers that are long term renting out full units without rent by room, use of STR/MTR, doing value adds, etc. 
    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    2y

    I've bought 10 SFR in the last 18 months and they're all cash flowing just fine. Keep looking and making insulting offers. Lol

    3Reply
  • Zach Jones
    OP
    FL · Member since 2020 · 45 posts · 28 votes
    2y

    @Nicholas L. I know it was a lot, kind of a rant/brainstorm/info grab of a post.. I currently own my SFH and have a MF property that is fully rented... I've been attempting to duplicate (stack) and in this current climate it just seems impossible. I know Fl isn't the cheapest of markets by any means and I know alot of people tend to search out of state for those reasons .. and I'd attempt to househack if it made sense on a tri/quad but running the numbers, CF is comical at best.

    @Eliott Elias Creative finance is a beautiful thing from all I've read.. but finding it, specifically owner financing, is much easier said then done unfortunately .. I'll take any advice in finding those deals though ;)

    @Travis Biziorek Awesome strategy my friend.. kind of interested in #2 and 3. The ADU would ba cool idea for a rental property if there was space for it. I have a family and don't want to share my personal space with a tenant. As far as a live in flip while keeping your primary... very nice. Are you doing and FHA and "living in it" while you do the reno? Also, presuming your doing some stuff yourself based on your previous experience. What is your rough time of completion on something like that?

    @Jim Spalding I use the traditional MLS' but also have a few realtors that send me things of my interest. Beyond door knocking/mailers, where do you typically find your off market deals? I know alot tends to be who you and working on your relationships, something I could be better at. Prices trending up forsure, but the good news is the influx helps rent keep rising too and IMO owning in Fl is an all around wing simply because Florida (and great tenant/landlord laws). I recently met someone who supposedly purchased w/in the past 3 years in GA several properties under 30k that rent for right around 900 a month. Phenomenal returns.

    @Benjamin Aaker Exactly!  I know they're buying, that's why I'm asking! You're right ab sellers understanding reality because 75/100k price cuts are becoming more common. Appreciate the hopeful insight and I hope you're right.  And on that same note, if/when the rates go down.. the values are going up.. way up in Fl I'd imagine based on the dog fight of a market we've currently got going on. 

    @Mason Weiss HOW ?? That's the secret sauce I need. These off market deals /direct to seller sound like heaven to me and I've read amazing stories about them but I haven't seen/heard of any myself. Not yet anyway. I'm an owner of a tri currently and own my SFH I live in. I couldn't do the live in flip due to the family unfortunately but I have thought about an FHA on a MF and I.. move .. and leave my primary alone for a year and rent out the other units. The upside, 3% DP, "yay".. the downside, putting that little bit of cash down is insanity these days unless you want a $5500 mortgage, lol.

    @Samuel L. Love to hear from a local.  The break even/couple hundred on a duplex doesn't interest me.  I don't say that at all in a cocky manner , just in the reality of using money as a tool.  I don't see the benefit of being out a 6 figure sum to make gas money.  Triplexes/Quads occasionally come up here in Volusia but some of these sellers have hit their heads and I really hope they recover soon because they're insane.  If I was looking for a primary, I couldn't agree more. Duplex>SF.  Multi Family Millionaire by Brandon Turner has made me a MF whore and its really hard to see the investment value in a SF at this point in time.

    @John Morgan MY MAN. I JUST talked to my realtor this week about him potentially getting on board to offend some people.. the worst they can say is no & seeing your response throws gas on that fire man.  Good for you. Love to see it.  All in the tX market I'd assume?

    2Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    2y

    Hey @Zach Jones, happy to chat more about it all via DM.

    We weren't wild about having tenants living next door either, but we're going to keep it a STR for now. Given the income it will generate though... we're into it :-)

    The ADU will be 1,030 sq ft with basically no attached walls. Our main home is one story and we'll be rebuilding our garage (with a larger footprint) and putting the ADU above it. So it will be quite separate. I also have a family, so I get it!

    We're living in our main home while we do the reno, yes. We've only partially started because we quickly learned that a fair amount of the reno is dependent on the ADU (e.g. trenching utilities, etc.)

    We're also putting a 1 bed/1 bath behind the new garage as a guest room. Our main home is a 3/2 right now so it will technically be a 4 bed/3 bath once the ADU addition is done PLUS the 2/1 in the ADU.

    Our kids' rooms are already renovated (we did those right away), so our plan is to relocate our primary bed into the new 1/1 behind the garage and just go to town on the rest of the interior of the main home (kitchen, living room, bathrooms, primary bedroom, etc.).

    The ADU timeline should happen soon. Our final architectural plans are in the city's hands now. We're hoping to break ground before the end of the year and build time is ~6 weeks. Then we need to do the finishes ourselves.

    The main home... no timeline on that. We'll see but this whole thing will probably take 1-2 years before it's FULLY done, I'd imagine. 

    We're on a vanilla 20% down conventional loan (luckily "only" at 5.75%). We paid $740,000 and will probably spend $200-$250,000 on the ADU. Then maybe another $50,000-$100,000 on the main house. I imagine when all is said and done the home would appraise for $1.3-$1.4MM on the low end.

    Gosh, now that I've typed that all out I realize what a journey we have in front of us lol!

    1Reply
  • Samuel L.
    Investor · Orlando, FL · Member since 2021 · 57 posts · 22 votes
    2y

    It sounds like you are looking at all of your options for your next move, so I am sure you will find/create an opportunity soon. Gas money, haha. I didn't think you would be interested in those numbers--I was just reiterating/confirming your experience running the numbers when you said "most properties are CF around a couple hundred a month." There used to be solid CF deals in the Daytona (Volusia) area a few years back but I imagine that situation has changed drastically. I also like the ADU idea if you can find the right contractors for the job. I have gone through quite a few trying to find the right ones to add onto and build out a detached garage as a small apartment and even getting those numbers to pencil out requires prudence.

    0Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    2y
    Quote from @Zach Jones:

    So I'm a fan of MF investing.. I've been looking at traditional financing with 25% down (it sucks I know but I've saved and don't know of better options currently) and I've even considered going FHA at 3% IF I could find a nice quadplex locally. The main issue with both of these plans, ESPECIALLY the FHA one, is the mortgages! With non primary rates over 8%, nothing seems to be able to create any kind of decent CF. I'm running numbers on properties with 120-150k out of pocket with ROIs in the 11/12 year range because most properties are CF around a couple hundred a month. I know I could refi eventually but I disagree with ever accepting negative CF and don't want to put myself in any compromising position. That being said, I know the big players that are into both SFH and MF aren't not buying due to the rates.. atleast I assume they're not. What can I do? What are you doing? How are you able to invest in this climate and make deals make sense? Also, I live i the central Florida area where we've got duplexes selling for around 4-500k.. Let me know your thoughts! I'd greatly appreciate it. Having a very hard time keeping a positive mindset toward RE investing with the current economic state and "whats to come".

    PS.. for those in my area who look at out of state investing, I'm attempting to learn more about this subject and getting over the sketchiness of never seeing a property or physically being able to handle something if necessary BUT, if you are.  Where are you looking at investing and in what class of property? Hows the CF?? 


     So here are my thoughts on your post

    1.  "I know the big players that are into both SFH and MF aren't not buying due to the rates.. atleast I assume they're not."- I could probably write a multipage response on why each big player has left the market or is not buying, but there are many that are still buying. Given that the work on CAP Rates of 5% or less, they can afford to pivot to different locations and using different strategies. Much of the money used by the big players is private money, so they are not as concerned with rates the way you might be. They have to satisfy their investors who are more concerned with safety then large returns.

    2. What can you do? - A few ideas here: If you can't cashflow in your market then pivot to another market- you will have to get out of your comfort zone.; See if you can raise private money and provide a decent return and still make your numbers; Maybe consider Build To Rent- Inventory is a problem so create your own; Review purchasing distressed properties, improving, renting, refinance.

    3. What are you doing? How are you able to invest in this climate and make deals make sense?- We purchase distressed and improve it.  

    - We do not use banks for small single-family or multifamily. We pool our money with others

    - We always or at least try and always have more than one exit strategy. 

    - We do not limit our investments to our backyard

    312-681-7487
    2Reply
  • Zach Jones
    OP
    FL · Member since 2020 · 45 posts · 28 votes
    2y

    @Travis Biziorek My man.. that is ALOT. But good luck on that journey. Looking at that ARV probably makes that pill a wholelot easier to swallow. My current set up wouldn't allow for an ADU with my homes layout but I do really like the idea of potentially doing something like that and looking at properties that could support that vision. Maybe a duplex/triplex long term and a small ADU or even the popular "tiny homes"/fancy sheds lol as a STR to generate extra income w/ a crazy return. Good luck on your future construction and I hope it fares you well in the $$ department!

    @Samuel L. Funny you mention Daytona.  I've seen neighborhoods there that were 50k for the average home in '20 now averaging around 190k for 1100 sq ft 3/1s in c/d neighborhoods.. Crazy what a few years can do.  And I appreciate the vote of confidence! Hopefully something comes along here soon, but it definitely feels good to complain a little and hear other opinions and not get told i'm crazy.

    @Crystal Smith 1- This might be a stupid question, but isn't private money typically more expensive then the fed? Unless you're dealing with partners/your peers..

    2- Build to Rent is BEAUTIFUL. I was recently turned on to this strategy by a friend whose father built a 4b/3b home in an up and coming area for around 320 (well over a year ago..), upon completion he had it rented immediately for over $3000 .  Great cash flow on a brand new property needing minimal maintenance and a great portfolio add.

    3- Buying distressed.. Are you buying tax liens/foreclosures? the thought of distressed properties is alluring because of BRRR and obviously a much cheaper sale price. And well said.. I definitely limit myself . Might be time to gain a little knowledge and confidence to move out of my county.

    0Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    2y

     Private money is a function of what you can negotiate with your private lender. If you can provide a lender with a safe and consistent return then it can be less than the fed.  Then you may have other lenders who will insist on high rates.

    We've actually never purchased tax liens. Over the years we've purchased bank foreclosures, preforeclosures, estate sales,......  Essentially properties where there is either a problem with the property or the owner has a situation and is distressed.

    312-681-7487
    1Reply
  • K S.
    Member since 2021 · 401 posts · 254 votes
    2y

    That was my issue looking at quads so I just purchased a small condo in cash for the same amount that it would have cost to be negative cashflow on a quad. Which one sounds better?, Instant ~6-7% return or negative cash flow for the next 30 years?

    Net worth is slower but if you're a high earner, you can pull it off and save yourself the hustle lifestyle some of these other forum members have to put up with and you can still pull cash out of your condo when the timing is right. Maybe not the hustle way someone will jump in on and tell you they make 100% returns with 0 down but there's always that catch. Just an alternative method for people in the same situation.

    0Reply
  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    2y

    The really big players have always been about equity not cashflow. Its a small investor/BP thing to focus on cashflow. 

    0Reply
  • K S.
    Member since 2021 · 401 posts · 254 votes
    2y
    Quote from @Henry Lazerow:

    The really big players have always been about equity not cashflow. Its a small investor/BP thing to focus on cashflow.

    Not everyone wants to be a big player and sounds like the OP isn't in
    that position. Most people aren't real estate professionals but have day
    jobs like doctors, IT engieers etc and not looking for the hustle
    lifestyle of a real estate pro. So if he can instant cashflow 6-7%, or
    10% with appreciation, he would still beat the market and he can
    leverage himself later by doing a cash out. It's worth comparing that to
    other investment vehicles. Not everyone's situation fits the big player mindset constantly found in
    every book on the shelf.
    0Reply
  • Dave KushPro Member
    Frankfort, IL · Member since 2022 · 204 posts · 132 votes
    2y

    Hi Zack,

    I think a lot of us are in the same boat. I have traditionally invested in single-family homes and I'm looking at multifamily now. In both cases, the interest rates are making cash flow very difficult. I also started looking at short-term rentals, and I found the same thing. In fact, in all cases, I found cash flow was possible in that 6 to 7% range still, but it got a lot tighter once the rates hit eight. The asking prices have not caught up yet. They may or may not.

    I agree, it is not a good idea to take negative cash flow. I suspect that in the short run it's just going to involve more networking. For example, I am looking at a building that I am hoping to purchase in the next couple of weeks, but either way, I'm going to start sending letters to all of the other landlords in the area and seeing who wants to go out to lunch. It may take a while, but I'm hoping I can get to a point where when one of them are willing to sell, perhaps they will call me first. I would love to hear what other people suggestions are for finding off market deals or other ways to locate cash flow as well. Thanks for posting.

    0Reply
  • Zachary Ware
    Member since 2022 · 405 posts · 455 votes
    2y

    Hey Zach,

    I think a lot of us are in the same boat here, more so in some markets than others. There are still some markets where you can find cash flow out there. I am looking outside of major cities in tertiary markets. As others have said, the goal of house hacking is to pay less than you would for rent. But even then, when you move out and put a tenant in your place, you want to be making money on the property, and I have not seen many properties in my market that fit that box. With interest rates and prices where they are, there are still a few ways that you can cash flow. 

    Value Add is a huge part of all RE investing. Buying at a discount, and putting in some sweat equity is a great play but can also be tough when househacking. If you want to use most of the first-time homebuyer loans the property will need to be turnkey. I would look into an FHA 203k loan if you are wanting to do renovations.

    Seller financing can also be a great option if rates are too high for values. You can negotiate the rate you are paying though these deals generally take more leg work to find. You will need to be sourcing deals off the street and looking for motivated sellers. 

    14Reply
  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 654 posts · 315 votes
    2y

    Zach,

    With my clients that are doing straight buy and holds, I'm seeing a heavy emphasis on the 2-4 unit space. 

    Specifically, a lot of HM Lenders will still classify them as 'Single' Family which allows it to avoid some of the rate adders of a true 'Multi Family' and keep a good DSCR, or CF. Plus, with HM you aren't allowed to live there which gives you the opportunity to add an additional tenant that you might not otherwise have.

    [email protected]417-427-2612
    1Reply
  • Corby GoadeBusiness Member
    Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
    2y

    Plenty of people are still buying, but they put more down in many cases. Or they're using their own cash, so rates have nothing to do with their analysis. Lots of 1031s still happening out there. 

    I'm confused- are you trying to house hack or buy a pure investment? What are the price points in your market?

    0Reply
  • K S.
    Member since 2021 · 401 posts · 254 votes
    2y
    Quote from @AJ Exner:

    Zach,

    With my clients that are doing straight buy and holds, I'm seeing a heavy emphasis on the 2-4 unit space. 

    Specifically, a lot of HM Lenders will still classify them as 'Single' Family which allows it to avoid some of the rate adders of a true 'Multi Family' and keep a good DSCR, or CF. Plus, with HM you aren't allowed to live there which gives you the opportunity to add an additional tenant that you might not otherwise have.

    By HM do you mean hard money lender? So they don't require you to live there but doesn't the high interest rate kill whatever additional income you make in that unit?
    0Reply
  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 654 posts · 315 votes
    2y
    Quote from @K S.:
    Quote from @AJ Exner:

    Zach,

    With my clients that are doing straight buy and holds, I'm seeing a heavy emphasis on the 2-4 unit space. 

    Specifically, a lot of HM Lenders will still classify them as 'Single' Family which allows it to avoid some of the rate adders of a true 'Multi Family' and keep a good DSCR, or CF. Plus, with HM you aren't allowed to live there which gives you the opportunity to add an additional tenant that you might not otherwise have.

    By HM do you mean hard money lender? So they don't require you to live there but doesn't the high interest rate kill whatever additional income you make in that unit?

     Not necessarily. Depending on the area there are a number of HM programs that are very competitive, seeing ~8.5%-9% depending on FICO.

    [email protected]417-427-2612
    0Reply
  • Zachary Inman
    Real Estate Broker · Indianapolis · Member since 2023 · 11 posts · 9 votes
    2y

    I've seen a lot of creative financing/asset class options here, but the simplest option is to pick a market with duplexes that aren't 500k. Check out tertiary midwest markets. 

    You're right, OOS investing is challenging. The key is to have a good "boots on the ground" team that you trust in those markets. Even then, no one is going to be as invested in your deals as you are, so going OOS always adds an extra layer of risk. I've seen many investors do it very well though. 

    0Reply
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