I just moved to the USA last year and it took me this long to get my credit score up to a good level Even though we had no debt and a reasonable amount of cash we brought with us from the sale of our home in New Zealand. We we have a mortagage free home and I just went to the bank to get a line of credit on to use for REI.
Im interested in buying multifamily out of state. Im currently in Northern Washington State. Im taking as much info in as i can with books podcasts etc and some of the concerns I have I thought Id share.
I listened to the podcast yesterday about investing in multifamily which is the area that interests me the analysis part was really helpful. The problem I have is that I think I can analyze properties but I dont know the areas. Brandon said bad areas attract bad people which I completely agree with but I dont know which areas are bad. Another issue I struggle with is many of the properties dont show many pictures at least of the inside of these multi families. So to do the initial analysis is difficult because I dont know the initial condition and its hard to put information into the analysis that would give me accurate feedback. If anyone can point me in the right direction I would really appreciate it.
A commonly used technique is to make an offer, maybe full asking price, then you do your due diligence by verifying the income, expenses, physical inspection, etc. If you find the deal is no good, you renegotiate or back out. During this time, the property is no longer on the market. You have it under contract, which buys you time to do the homework. Knowing the area is something that you would do before you make an offer. Learning a market takes time. What is the market rent for the area? Prevailing Cap rate? Crime, demographics, job market, growing or contracting economy. These things take time and I don't recommend you go deeply into debt on a property before you find out if you bought in an area that you can't exit. Think about how you will exit before you get into a deal. Be sure, don't guess or take anyone's word.
@Steven Kennerley Welcome to the area!
I've been looking into multi families for a while now.
Your post said you were looking for out of state multis, but then other parts made it sound like you were looking in your area. I'm a little confused on which.
Regardless, send me a direct message. I'd be happy to talk to you about it, or to meet up somewhere for coffee.
There is a Bellingham group of investors. You should join us!
@Steven Kennerley yes, you should definitely join Bellingham's REI group. It can be found easily on meetup.com.
I am also looking at buying one or more MFR in other states. Do what you want of course, but I am doing a top-down approach. i.e. start with the state, then county, then city, then neighborhood and finally property. Your budget and risk tolerance will play a big role as well.
Once you have a general area in mind, i'd reach out to realtors on Bigger Pockets operating in those areas. Tell them what you are looking for, what you need, dont need, etc., and budget.
Once these realtors start sending you properties fire back as many questions as you need. Assuming you are dealing with an honest realtor, ask for their feedback. They SHOULD know the area and be able to provide a lot of info not available in the public listings.
After a few months of this, you should get a very good idea of what is good and what isn't.
just my 2 cents.
@Patrick Britton thats really helpful. I will definitely be at the next meet up. Thank you.
@Robert Freeborn Hey Robert I am looking out of state primarily because I dont think I can find multi family with the right numbers in our part of the country. I will be at the next meet up hope to see you there.
@Anthony Dooley Thanks for the advice Anthony. I appreciate it, this is all very helpful.
Look at crime maps for bad areas. Trulia has "heat maps." Also talk with local commercial brokers, managers and lenders about neighborhoods. To figure out offering price due to necessary condition you can talk with the agent or have your team members look at the deals. Eventually you need to see it. I would not recommend retrading (renegotiating on price). Doing it once is ok, but do it often and you will no longer get taken seriously
@Steven Kennerley I can send a map of OKC over with a breakdown of what class each area is considered and what price points and rates of return you should look for. Are you still looking out of state?
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