Going from Single Family Homes to Multi-Family Homes

[David Cohen]

I am working on buying my 8th buy and hold SFH. I like them and they all are rented and doing ok. I'm good at the management part of it. But I'm feeling like I need to think bigger. I have people who I think I can get to invest in a bigger deal. So, I'm thinking about looking for a multi-family, commercial-loan deal.

The rub is that I'm not sure how to find a good multi-family deal. I've read a lot on BP about how to analyze the deal, but just don't know how to get started. Any suggestions?

[Douglass Benson]

Originally posted by @David Cohen:

@Douglass Benson And how do you find your MF deals?

This is a long post so beware - 

No two findings are alike, but they share something in common.  Bad landlords have bad tenants and it drives them out of their minds and out of the business.  I LOVE bad tenants, until I own the place then I do not tolerate them and they ALWAYS leave because they cannot survive in a building that is run correctly.

Our first building came from a referral from my brother in law who said the owner was sick of being a land lord because of his crappy tenants.  Our second building was due to a cold call that I put into the owner.  I liked the building, I went to the court house to figure out who owned it and I called him.  We are now business partners. Our third building was a court bankruptcy.  The listing agent refused to show it to us because she said there were too many showings and she already had an offer so we gave up on it.  A week later we discovered it was still on the market, the first offer fell through so we offered and got it.  Our fourth building was due to a guy who knew we did multi-family and said he was SICK of multi-family because of all his crappy tenants.  He carried paper back on a no down payment land contract JUST to get out from underneath the building.  Our fifth building was a referral from a listing agent, the seller didn't like the apartment business because he was scared of his own tenants and my sixth building, the listing agent knew I was in the business and called me before he listed the property.

Just put the word out there that you are in the business and deals will come to you.  Trust me.