Hello from Louisville Kentucky

[Walt Waters]

I'm a full time employee at a research institution in Louisville who's interested in owning a small multi-family (4 unit max) as a way to gain experience as a landlord. I want to see if I can handle dealing with tenants, upkeeps, repairs, acts of god, etc. Ultimately, I'm interested in owning or leasing an apartment complex as a means to bring in consistent cash flow outside of my other investments. 

I look forward to engaging discussions about this topic with members of this forum. I have already benefited from your wisdom by lurking here in the past few days. Thanks. 

[Michael Seeker]

Originally posted by @Walt Waters:

Originally posted by @Joe Fairless:

@Walt Waterswelcome to BP. I'm just up the road from you in Cincinnati. Are you planning on living in one of the units of your 4-plex? 

That's correct Joe. I think living in one unit of a 4-plex would be an ideal situation for me at the moment. I have the cash on hand to put a down-payment on a standard 4-plex building and I can qualify for an FHA loan (to my understanding) since it will be my first home. Unfortunately, there are no 4-plex buildings for sale in the entire city of Louisville! Even if there were, my area of residence would be somewhere near the highlands, st. mathews, downtown (east of floyd street) or Crescent hills. There's just not many options now, I'm afraid.

Hey Walt, welcome to BP and best of luck with your investing in Louisville!  It's a great place to invest in rental property (unless you refer to the BP headline study on best/worst cities to invest in).

If you are looking to get owner occupied, 30 year financing then 4-units is as high as you can go.  I have to disagree with your statement "there are no 4-plex buildings for sale in the entire city of Louisville!".  This just simply isn't true - there are almost always quads for sale...a very very brief search revealed this one for example.  They are out there, you just need to do some digging.

Unfortunately, your search criteria doesn't really line up with the reality of the city so it will be difficult to find what you're looking for. Most 4-plexes that come up for sale are located around the Hikes Point area and constructed in the 60's to 70's or are around UofL and are turn of the century SFR's converted to multis. Multifamily in or near the Highlands will most commonly be 2 units because that's how the style of property in that area is easiest to split up. The 4-plexes tend to be park-side where there are larger turn of the century SFRs that have been converted to quads. Good luck waiting for one of those to pop up...people just don't sell stuff in that area!

These are just generalities, but what you're looking for is an apple in a field of orange trees.  You might be better served to search for apples in a field of apple trees (look for 4-plex properties where they are much more common) or look for oranges in the field of orange trees (look for duplex or triplex in the Highlands).

To add to the challenge, you're trying to buy multifamily property in a very competitive environment.  Good properties that are reasonably priced are not on the market for long which helps fuel your sentiment that "there's just not many options now."

If your goal is to find the perfect 4-plex in the perfect location then you should be prepared to wait a long time.  If you can be more flexible in your parameters (open up to duplex/triplex and/or other areas of town) then you should be able to find something that fits what you're looking for much more quickly.