The secret to investing in multi-family properties
August 22nd, 2008 Jacquie Cliff - Real Estate Broker Posted in Uncategorized | No Comments »
I sat through a webinar tonight about buying multi-family properties and why they are such great investments. They went over all the standard reasons and I agreed with pretty much all of them. I will re-cap a few of them.
Multifamily properties are easier to finance
This is for the most part true, because as you get up and away from duplex properties and into properties with 6 or more units banks are worried less about your credit and more about the long term financial stability and profitablity of the property.
Multi-family properties are easier to manage than single family rentals
Trying to juggle 15 single family homes can be a nightmare! They are generally all spread out, have more pieces to need repair or replacement and just plain more expensive all around. With multi-family properties you can hire a good management company and let them deal with it. Even if there are repairs that wind up needing to be done, they are all in one place.
It is easier to gain equity with multi-family properties
Multi-family properties are valued not on the fickle winds of supply and demand, but are valued more on their capability to produce cash flow. Because of this every dollar that you can increase will increase the value of the property by about ten fold.
The key element for investing in multi-family properties is having money to put down.
Banks are very willing to finance multi-family properties, but having cash down is essential. Expect banks to want 20% down. This of course doesn’t need to be your own money. Very often people will partner up with people that have money to invest, to purchase properties. If there really is any secret in investing in multi-family projects, finding enough private investors or ‘angel investors’ is it. Eventually you will build up enough cash flow to fund your own purchases, but until then you need to find qualified people to invest and team up with you.
That is the crux of it, and you didn’t even have to sit through an hour long seminar that really was more of a sales pitch for the speakers program to teach you how to analyze cash flow and find angel investors, which by the way was discount priced at only $3,945.
If you have any questions about duplex and multi-family properties in the Lynnwood or Everett areas, or the Greater Seattle area in general, give me a call at 425-773-3149 or email me at Jacquie@jacquiecliff.com. If you are in other parts of the county and need help with your real estate and multi-family investing questions please email me and I will help you make a connection with a top notch agent in your area!
Leave a Reply