How to invest in a 4 plex when new to the rental world.

8 Replies

I just recently in the last month purchased my first duplex here in Alexandria MN.  Still in the process of fixing up the main floor unit from the abuse it took from previous renters.  I am looking for advice and knowledge on how to go about getting into a second deal with all my funds tied up in this duplex currently.  There is a 4 plex on the market here that I am just starting to do my research on. Each unit is a 3 bed 1 bath.  Seems to me like it could be a good cash flow property....... asking price is $389,000.  Any creative ways to get into something like this, this early or is it to much of a stretch.  Thanks

Focus on the project you're working on right now. Fix it up and rent it out and get it stabilized. Then look for the next deal. 

@Aaron Harren I would agree with @Antoine Martel to finish this project and get it stabilized. Have you spoken with any lenders about acquiring the 4plex? Would it be a straight investment property? If you haven't, I would suggest you speak with a few mortgage companies to see if you can qualify to purchase it. 

Do you have a refinance lined up to pull your equity out of the duplex once complete? 

I would say that you need to find an equity partner to get into the second one right away.  I understand that you have one in the works but is that taking all your free time?   If you get an equity partner you will have someone else helping you with the project on day one.  Look into it.  IF it is a really great deal you might wholesale it to someone else and make a little money on it. 

Tag me if you have any questions and I will get back to you. 

Is there a time frame before you can refinance the property 

@Dan Barli ?  It appraised for $15,000 more then we paid for it plus now the updates i’m Doing.  Thanks

@Michele B. do you know how it works with home equity loans if you’re allowed to have more then one out on a property?  We have a $55,000 currently all used up on our home we live in.  I used half of this for me down payment on the Duplex.  But when we did our equity loan for $55,000 we did have the option to go up to $155,000 but at that time i wasn’t on this adventure yet or had it on my mind even.  Can you get a second one?  If so are the terms stricter?

Thanks Aaron 

Originally posted by @Aaron Harren :

@Michele B. do you know how it works with home equity loans if you’re allowed to have more then one out on a property?  We have a $55,000 currently all used up on our home we live in.  I used half of this for me down payment on the Duplex.  But when we did our equity loan for $55,000 we did have the option to go up to $155,000 but at that time i wasn’t on this adventure yet or had it on my mind even.  Can you get a second one?  If so are the terms stricter?

Thanks Aaron 

Okay so they have told you at the bank that you can have a HELOC for 155 K? But you just signed for 55 k. ? Then just go back and ask to expand or change the number.

Each lender has their own guidelines, so it's best to speak with a few. Some that I have seen require a seasoning period of 90 days before they can refinance it. I've heard some want 6 months @Aaron Harren

@Aaron Harren

Congratulations on your first duplex! Regarding the quad...You stated "it seems like a good cash flow deal". Is it quad fully rented? Will it need work? Once you are certain about the numbers on it and it's truly a great investment, go back and increase the HELOC you already have and use those funds. No need to reinvent the wheel looking for financing elsewhere.

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