Multi-Family and Apartment Investing

User Stats

14
Posts
5
Votes
Alan Cassidy
  • Rental Property Investor
  • Cleveland, OH
5
Votes |
14
Posts

Next Step Apartment Building

Alan Cassidy
  • Rental Property Investor
  • Cleveland, OH
Posted Jul 17 2019, 09:24

Hi, I recently purchased my first home in Ohio (april of this year), a 2 family for 120k FHA 3%~ down. It appraised for 129k.

Recently there have been some HUGE announcements in the area that have lead to a house 4 doors down, smaller than mine selling for 210k (the house that sold is a 2 family about 1900 square feet, mine is about 2300 square feet) The only difference is both of the units were updated where as currently I only have 1 down. I will have the 2nd unit that I reside in finished ideally in the next 3-4 months if all goes well. I'm shooting for winter/spring at the latest.

When all is said and done, It seems very likely that I should have somewhere in the ball park of around 100k to roll into a new real estate investment. This has happened MUCH faster than i had ever imagined and I feel extremely unprepared even though I'm constantly reading up on the topic. I think the next logical step would be an apartment, and based on my limited research it seems for around 500k I should be able to get somewhere around 10 -12 units or so. 

My main questions are 

1. Would I be better off going in with someone and having 200k to put down on something like maybe a 25 unit building?

2. Is it possible to take the 100k and purchase 4/5 100k properties rather than one 500k~ property?

3. How likely is it to get a commercial real estate loan with 20% down?

Thank you very much!

User Stats

4,750
Posts
4,317
Votes
Greg Dickerson
  • Developer
  • Charlottesville, VA
4,317
Votes |
4,750
Posts
Greg Dickerson
  • Developer
  • Charlottesville, VA
Replied Jul 17 2019, 09:44

@Alan Cassidy it all depends on your comfort level, knowledge and experience. Multifamily is definitely the way to go but you need to educate yourself on the space.

Single family is a much slower way to scale and carries a lot of risk as one bad tenant or capital expense can wipe out the cashflow and put you in the red fast.

Commercial and multifamily will typically require 30%-35% down depending on the lender and the property.

User Stats

14
Posts
5
Votes
Alan Cassidy
  • Rental Property Investor
  • Cleveland, OH
5
Votes |
14
Posts
Alan Cassidy
  • Rental Property Investor
  • Cleveland, OH
Replied Jul 17 2019, 09:49

@Greg Dickerson

Thank you

Something I just thought of, let’s say my property appraises somewhere near 100k Over what I owe. Am I able to rather than selling this property take out that equity and roll that into something else? While still living in /renting out my current 2 unit?

User Stats

4,750
Posts
4,317
Votes
Greg Dickerson
  • Developer
  • Charlottesville, VA
4,317
Votes |
4,750
Posts
Greg Dickerson
  • Developer
  • Charlottesville, VA
Replied Jul 17 2019, 09:57
Originally posted by @Alan Cassidy:

@Greg Dickerson

Thank you

Something I just thought of, let’s say my property appraises somewhere near 100k Over what I owe. Am I able to rather than selling this property take out that equity and roll that into something else? While still living in /renting out my current 2 unit?

Yes typically but that will depend on the lender, your financials etc.