Hello to my fellow investors I am looking into investing in multifamily units anything from at least a four-plex up to a 10 unit to start can anyone tell me the best site to find good property & the best way to get started..blogs on this.? Etc..any & all help would be appreciated much
Zillow is always a good place to start. Also loopnet is a good place to research commercial properties, though I have heard that good deals are hard to come by on that site. As far as research goes I would start in this forum category and read back as far as you can. You will get a lot of information from previous posts. If you are just starting it is recommended to start small (2-4 units) as the financing is residential as opposed to commercial. Lower rates and better terms. Plus if you apply for commercial (5+ units) the lenders like to see previous landlord history. Not saying that you cant start big though, it all depends on your resources. You're definitely in the right place to learn!
Hi @Brian Jones
One of the many ways to get started:
- Start reading books on MF - Example - Multi-Family Millions by David Lindahl
- Financial Education - Understand how to value Real Estate and key financial concepts - Understand 1) Capitalization Rates or Cap Rate and Cash on Cash Return - read up on Investopedia 2) Read up 50% rule 3) Other financial concepts Internal Rate of Return, Debt-Service Coverage Ratio, Break-even Ratio, ROE etc
- Read articles on MF Investing
- Network with people who are currently doing MF and surround yourself with the same people
- Use BP Events and Happenings section to see local meetups in your area
3. Analyze -
- Analyze MF every day on all the financial metrics and analyze as many MF properties as you possibly can
- Overtime you will learn to differentiate between good vs. bad and you will have a better idea of what you like and what you don't
- Get your financial affairs in order - Pre-approval, how you will source funds etc
- Take action - Don't just wish for things to happen work for it.
Hope this high level post points you in the right direction. Good Luck!
Azeez really nailed it in his recommendations! Nicely done!! All I would add is this is a relationship business so you are going to want to start reaching out to some brokers at some point per #5 above. You are in a spot that is covered by both commercial and residential brokers (you can find many of the 10 and below building in the MLS even though they are considered commercial technically). I'd start there and once you are more comfortable per Azeez's recommendations above, I'd start reaching out to some commercial brokers as well. This is a business that is learned best by doing it. A good foundation is desirable in this business but don't get so caught up in feeling you have to know everything before getting out there and testing the waters.
You can do this!
@ Jeff Brower..Azeez K & James Rey thanks so much guys for all the great info thats what sets BP apart from other sources all the great help & advice..
If you want to search MLS leads, I prefer realtor.com or redfin.com (if they serve your area) over zillow.
I would think hard before jumping right into 4+... In many areas 5 units is the cutoff for extra rules like rent regulation. You will have to deal with commercial financing as others have mentioned. If you get screwed on your first deal it could be life-changing versus getting screwed on a 2-family probably won't bankrupt you. Just some things to consider...
@Azeez K ok have another question sir..are securing FHA or VA loans the only way to purchase a..ummm lets said a 4 plex? What are your creative financing options? Can you lease purchase..seller finance? Etc are these options also available on larger units such as 5 - 100 units?
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