All Forum Posts by: Robert Rixer

Yes the theory is sound. Every deal has it's own unique variables but this strategy would generally work. It's all about finding a deal like this.

Banks will typically want to see 12 months of seasoning at stabilized rents before cashing out. Class A you're more at the winds of the market rather than being able to force appreciation like a true value-add deal.

Congrats on the SFH's. Your theory on the multifamily is correct however in practice in today's market conditions, it can vary wildly. Few properties these days will support a full cash-out, most won't even get a partial cash-out. Sellers expect to take a good amount of the upside, even if their rents are low.

For someone who is coming into this new, you will likely be taken aback by how little these deals make sense.

Perfect question for ChatGPT. It may not give you a totally accurate answer, but it will be  useful enough for what you're trying to achieve.

@Michelle Simoni It's unlikely you'd be able to get higher LTV's from seller financing than you'd get from traditional lending. I see most seller financing in the 50-60% range. You could maybe get more from a very motivated seller or if you were seriously overpaying. Your best bet is trying to bring on a capital partner.

A lot of positive reviews from these mentors/gurus comes from people who psychologically feel the need to justify why they parted with thousands of dollars even tho deep down they know they were duped.

If these gurus were really successful, they would be out doing deals, not selling courses. Prime Tiger Woods wasn't giving out golf lessons in between tournaments.

2-4 units typically sit on the same size lots and have the same FAR's meaning the buildable square footage is the same. So the developer can build 4 smaller units or 2 larger units, assuming zoning allows. The 4 will still generally cashflow better overall but usually nowhere near double a comparable 2-unit.

Limiting factors on purchasing the property are EM (5% on $10M is $500k of your own cash you're putting at risk), needing a net worth of guarantors to equal the loan amount and last but not least, finding enough capital who's willing to invest with a first time investor.

You can compare the numbers but the biggest factor here by far is you'd have to partner with someone which causes orders of magnitude more complexities. What happens when one wants to sell and the other doesn't? What happens if one wants to manage and does a poor job? Many a friendship has been destroyed by going into business with each other.

If you don't have MLS access it's tough to find actual rented data, however you can use apartments.com to see active listings and gauge rent comps by days on market. I would reach for a more mid-tier duplex since you'll be living there and it will generally be better long term. Don't limit yourself to list price. An owner of a higher listed property may be willing to take a steeper discount than a lower priced property where the owner is stuck at their list price.