First Brrrrrr.....Multi Family Deal

[Michael Dengler]

I am a new investor looking to break into small multi family investing in the south jersey/philadelphia area. My first property is going to be an owner occupied deal and I think I want to implement the brrrr strategy to get me started. I already started working with a local realtor that is starting to send me properties that meet my criteria. This may change as I get immersed into the process but here is what I have starting out:

2-4 Units

Light to moderate rehab(no turn keys)

I need at least one open unit if I am going FHA owner occupied on the deal

150k and under asking price

Properties that are either brand new listings or properties that have been on mls for over 60 days or expired listings

I am using the spreadsheet I downloaded off BP for the owner occupied calculator

Here is my questions:

I have some light knowledge of what flippers are looking for on properties they pick up: 70% ltv of arv-minus repair cost.

I was told that may differ when looking for a multi unit? When I watch the Brrr and rental videos I don't hear much about buying at 70%. Its mostly about Cap Rate and ROI.

The goal is to obviously buy at a discount, add some value to the property so I can cash out refi and buy my next property. How do I make sure I have enough equity cushion when I buy so I am not soley relying on my rehab adding enough value to allow me to take cash out after 6 months to a year?

Would you recommend going FHA with the 203 B construction loan or buying off a wholesaler at a big discount and refinancing conventionally after the rehab?

Finally for a Brrrr is it easy to find a property that is vacant of all units to rehab or try finding one that has at least one unit occupied so I am getting some income during the rehab?

Thank you

Mike

South Jersey/Philly 

[Bryan Beal]

@Michael Dengler one piece of advice - if you can live in the property for 2 years as your primary residence, you can sell the home without paying taxes on any capital gains. Just food for thought.