All Forum Posts by: Chris Washington

I personally don't care about purchasing a property where a violent crime occurred, but the issue is disclosure. Some states require disclosure to potential buyer/renter up to 3 years after the violent crime occurred. It sounds like your crime was recent, so 3 years is a long time away.

Given that the crime was recent, I likely would have passed on this property as well.

I'm evaluating a potential deal on some rental property in the Highland Heights/Cold Spring area in Kentucky. This is my first time looking at property in KY, so I have very limited knowledge/history of the area. Would like to get feedback from people who live or invest in this part of town. Any and all perspective is welcome, but below are a couple things in particular I'd like to have answered:

- Do you/would you invest in this area?

- What class (A/B/C/D) would you rate the area? 

- It this area primarily Blue Collar, White Collar, or Student tenants?

- Has there been any recent significant civil investment in this area?

- How is the school system in this area?

- How have rents trended over the past 3-5 years? Have they been stable or has their been growth/decline?

- How much of an impact does NKU have on rentals in this area?

- Are there any unique local laws or ordinances in this area that I should be aware of as a potential landlord?

Thanks in advance for your time and perspective.

@Account Closed MF does have to be evaluated differently, and the definition of a "good" return truly depends on your market, asset class, and personal investment criteria. Having said that, some investors use a $100/door/month rule to evaluate cash flow returns. In the case of your 100 unit class B property, $10,000/month cash flow would meet this generic criteria. 

Having said that, I'm curious as to what you feel you need before you are ready to "start looking" at apartment complexes? SF and MF are two totally different worlds, so the experience that you are gaining in SF will not necessarily guarantee you success in MF. Would love to know more on your thought process here...

@Andrew Nickell 

Welcome to BP! Not sure exactly if I agree with leaving school, but what's done is done and I congratulate you for at least making a decision and taking the leap.

From my experience, knowledge can trump age and experience. Make sure you know your stuff and can confidently speak about the business you are in, and people should get past the age hurdle.

Once you prove you can make money with your deals, guaranteed no one will care how old you are!

Hope this helps...Best of luck!

@Jason Boulter In multifamily RE, 4 units and under is still considered residential property, and can qualify for most FHA/low down payment type financing programs if owner occupied. At 5 units or more, you move into commercial property, which is financed and valued very different from residential property.

For your first property, I'd recommend staying on the residential side to maximize your financing options and minimize your initial down payment for the property.

Hope this helps...

@Marvin Allport Glad to see you were able to find value in the website. We wanted to put something together that would be helpful for property owners, investors, and other principles alike. 

I've been involved with RE for the past couple of years, and have made some money buying, improving, and selling some personal SFH. However just learned about, and decided to jump into, commercial multifamily this year. Feel free to reach out if you have any questions I can answer for you.

Hi @Jason Boulter and welcome to BP

You definitely have a great idea to start building your RE portfolio while finishing your engineering education. I would recommend connecting with a local RE agent and looking for a 4 plex to househack. If you live in it, you should be able to secure low money down financing. I think this is a great entry into the world of multifamily, and it also helps you reduce your personal living expenses.

Best of luck!

@Harris Dixson

Welcome to BP! This is definitely the right place to help you narrow down your focus and figure out your next steps.

My first question would be what type of multifamily you are interested in? 1-4 units (residential MF) and 5+ units (commercial MF) are handled very differently, so depending on what you want to focus on your next steps will be different.

Personally, I am focusing on larger multifamily (specifically 20-50 units or 75+ units). If commercial MF is were you decide you want to specialize in, your first step (assuming you've already educated yourself on all the basics through books, podcasts, etc.) is to learn how to analyze commercial MF properties. Analyze as many properties as you can until you are able to determine the difference between a good and bad deal, as well as calculate what price you would offer on a property based on your investment criteria and local CAP rates.

It will be easier to find a partnership/funding once you have a solid deal with good numbers in hand. You can shop your deal throughout your network (family, friends, coworkers, people you've met at RE meetups, etc.) to find someone to partner with.

Hope this helps...Best of luck on your REI journey!

@Hisashi N.

I think this 100% depends on your RE investment goals. SFH and MF buildings (specifically 5+ units) are two different worlds. A dollar is worth a dollar, so to me it makes no difference whether that dollar is earned through SFH or MF investments. If you have become a SFH expert and have carved out a duplicatable niche that will consistently return you 12-15% ROI, I would say full steam ahead.

It's true the numbers are bigger in MF, but that is both the potential gain and loss side. If you will be able to reach your REI goals through SFH, I don't see any reason why you would jump to MF.

Hope this helps...best of luck!

Hi Michael,

Welcome to BP! Some great posts in this thread already. One thing I will add is I always run my analysis inclusive of professional property management. Understood that you may decide to self manage, but you never know what could happen in the future which would cause you to no longer be able to manage the property. As such, I would recommed including management in your upfront analysis. That way, if you self manage you are in essence "paying yourself" to do so, but you also have enough headspace to pay for management if you choose to go that route. 

IMHO, if you are overpaying and the cash flow is slim once you include a management fee, I would try to negotiate the price or walk from deal.

Hope this helps! Best of luck...