Investor · Sacramento, CA · Member since 2014 · 46 posts · 28 votes
Hello colleagues, Thanks to BP podcast, I'm a landlord of a fourplex in Sacramento, (near CSUS) zip 95825 I've found out that 5 four-plex buildings (quadruplexes) on my street will be going to MLS in few days. I got a hold of the listing agent, and expressed an interest, he is open to hear my offers before he lists them. (all 5 in one sale, asking about 1.2 million) I bought my building 9 months ago for 285K (and it was in a bad shape) so the 5 building deal sounds good, (in addition they're rented and half of them are remodeled)
Here is the question: How can I find a partner who would finance everything and I would deal with management? (since I live on the street) If I would partner with a potential investor who would finance the down payment,- what should my partnership look like? (% wise)
please advise? I would like to hear @Brandon Turner thought on this. (if you can)
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
10y
Hey @Elijah Artman- yeah, like Alexander said - make sure you have a firm grasp on the numbers, as a partner is gonna want that. The best partners also come from pre-existing relationships. People you've met at local real estate clubs, family, friends, etc. So networking is key in this area. Hope that helps some!
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
10y
Hey @Elijah Artman- yeah, like Alexander said - make sure you have a firm grasp on the numbers, as a partner is gonna want that. The best partners also come from pre-existing relationships. People you've met at local real estate clubs, family, friends, etc. So networking is key in this area. Hope that helps some!
Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes
10y
$60K a unit in 95825 is a great deal, even if you are talking about the rougher areas off of Northrop or Bell. Owner must be in a rush because they would go for $300K+ each separately on MLS. You should not have a problem finding a partner.
Investor · Sacramento, CA · Member since 2014 · 46 posts · 28 votes
10y
@Joe Bertolino is right, they're all great deal. Average fourplex on this street generates: (mine in particular) $3750 per month (45k anually) $500 goes for utilities
Lender/Investor · Glenwood Springs, CO · Member since 2013 · 218 posts · 103 votes
10y
I thik the OP was saying that all five 4-plexes are 1.2 million, or $240k each @Joe Bertolino.
But that brings up another question... if they are in decent shape and worth $300k, why wouldn't you try to buy them up with a JV partner and list them individually and make $60k per building or $300k? You could also try to see if there would be any way they would owner finance.
Rental Property Investor · Redwood City, CA · Member since 2015 · 51 posts · 12 votes
10y
I have looked at many properties of this type in the Sacramento area. The properties I looked at, the fourplexs in particular, sold for over $300K. And even recent properties that were priced lower to generate demand went for prices in this range as well. So why have I chosen to stay with SFH at this point? Every time I looked at these properties and ran the numbers, taking a generous reserve based upon the age of the units, I couldn't convince myself that I was getting a CAPX that was acceptable. And it was easy to define a scenario that was likely to occur that would lead to negative cash flow.
That being said, I do think balancing out my portfolio with multi-family is still the right move. If the numbers work across a range of expected outcomes then I would be a buyer too.
Investor · Roseville, CA · Member since 2009 · 1k+ posts · 583 votes
10y
@Elijah ArtmanIt seems that a 50/50% split is a good start if there is no deal for you without this partner. or the split is whatever you two agree on. Now the hard part is finding someone who wants a hands off investment. The price seems like something that should sell fast considering the short supply of inventory. You could post on the local rei meetup groups looking for a funding partner. check with the listing agent to see if seller would do a 2nd with seller financing and then get financing on the 1st mortgage to complete the sale. good luck