How to analyze a deal for multi-unit?

[Myles Allen]

Hello everyone, I'm sort of new in buying multi-unit properties. My client is looking to widen his portfolio in real estate and love the idea of multi-unit, considering that he will just rent out the units and not stay on the property. He not necessarily concerned with a huge return on rent, as long as the rents are covering the mortgage. With that being said, what should I be looking for when searching the MLS? I've noticed a few in the south bay, but want to make sure the deal is good before we submit any offers.

[Chris Mason]

50% rule has always seemed reasonable to me as a first cut.

You as his realtor should be doing a normal CMA for him, and a rent CMA for properties, as well as asking for what the units currently rent for when you ask for the seller disclosures. You also need to know about rent control laws in the areas you're checking out for him.

You want this property to be a huge money making success for your client, because then he will get the "Real Estate Bug" and come back to you to purchase future homes. This isn't one where you think of selling a home, this is one where you think of setting your client up for as much financial success as possible and truly adding value to his life. That very well might mean you tell him "bad idea" on the first 3 homes he wants to write offers for $X on - tell him to either not write the offer, or to write the offer for much less than his $X. These investor types are huge freaking money makers for you, **if you help them make money** in turn. 

For owner occupied FTHBs, you nudge your clients to make higher, more 'serious' offers. For these guys, it would be OK if you wore your wrist out from making so many vaguely lowball just to see if any stick. Don't get stupid with it, but find the balance.

Investors are about 5x as much work for you per closed transaction, if you're doing it right. But they pay better in the long run, so this is opportunity knocking. 

You aren't selling a home, you're playing kingmaker and setting your client up for an empire.