All Forum Posts by: Robert Rixer

I can't help you with Jersey specific questions. But 3) Try multifamily specific brokers, crexi and loopnet, although 2-4 units maybe scarce.

4) A home equity line of credit is a good source of funds however it will generally make your overall monthly payments higher, so unless a deal is very solidly cashflowing, a HELOC may put you into negative cashflow.

7) Typically electric/gas are paid by the tenant - however this isn't true across the board. These are some of the questions you have to ask on a case-by-case basis.

LLC's are still the way to go but yes you can't tap into owner occupied mortgage tools such as HELOC's or high leverage. Unpopular opinion since I know you're trying to buy the next property, but keeping your equity in a deal is gold. Payments stay lower, cashflow better and it'll boost your balance sheet not to mention lower risk when things go awry.

EMD is a fickle thing. Typically it's meaningless until it goes hard and percentages of pp have definitely dropped over the years. Old school investors typically value it more. It's hard to negotiate EMD down because then it gives the appearance that you're not a serious buyer. A buyer making a huge fuss about EMD is likely going to be a red flag in the seller's eyes.

Best way would be to negotiate a smaller amount up front and then put the balance of the EMD down once you've gone through your DD.

Put up other collateral or increase your offer. I never liked seller financing as the leverage in the negotiation goes to the seller.

Good on you for making the jump into multifamily. You will still have an electric bill even if tenants pay their own unit. You will likely have common area lighting (interior and exterior), perhaps heating and cooling too. 

But my biggest advice, make sure you properly comp the property. Make sure you are not overpaying. Just because you can afford it doesn't mean you should. High down payments will make almost any deal cashflow, but equity wise you don't want to be starting off underwater.

There are too many variables to get any kind of meaningful prediction. Positive and negative forces will cancel each other out to some extent. My opinion is that the overall direct effect of immigration policy on any given market will pale in comparison to other factors such as the economy, inflation and deregulation. 

These are all outside of your control. If you buy in at a good cost basis with solid fundamentals, you're going to come out ahead in the long term.

@Ian Stuart Interesting take. If you are correct, I think it's far more than just the multifamily market that will be in trouble.

@Ray Hage Agreed. I think the idea of owning your house at all costs has had it's day in the sun and people are waking up to the fact that renting is often times the financially sound decision.

@Anna Catron High leveraged operators have always been wiped out with enough time, I don't think that will change. But I do share the sentiment that leverage in general will always be around.

@Sean Wagner Agreed on the subsidized renters for sure

Based on the numbers alone, it seems like an incredible deal - even at $560k. So I would be suspiciously looking out for "what's the catch?"

I want to get the BP community's take: Where do you see multifamily being in 20-30 years time?

Many of us on this sub-section have either gone into or fallen into multifamily investing exclusively so I believe it's worth asking the question of what the future could potentially hold long term. Could there be an existential threat in multifamily like Office had with Covid or Retail had with the rise e-commerce?

Average cap rates across the country have halved in the past 25 years. Will this trend continue, plateau or reverse course?

Will the ratio of apartment renters to the total population go up or down in the future?

Thanks in advance!