Barrington, NJ · Member since 2015 · 8 posts · 4 votes
I've always been the most interested in commercial midsize multifamily investing. Want to get into the game in the very near future. Is it possible to start with small to midsize commercial multifamily properties? Pros cons, if it is even possible at all? Recommendations? Thanks!
I've always been the most interested in commercial midsize multifamily investing. Want to get into the game in the very near future. Is it possible to start with small to midsize commercial multifamily properties? Pros cons, if it is even possible at all? Recommendations? Thanks!
We are probably typical. We purchased a four unit, like the business, liked the promise of a larger unit so two years later we purchased a 16 unit. That was 10 years ago and we are at 81 units now.
You can start at mid-size but you might run into finance issues as your lenders might not be comfortable if you don't have experience in the business. If you run a duplex, tri or quad for a year or two you can show off your chops and comfort the lender. At least that is what worked best for us. Once we reached 32 units, we were viewed as savvy multi-family operators. We financed two deals last year and had banks calling us to give us loans!
Investor · Richmond, TX · Member since 2016 · 12 posts · 4 votes
10y
From what I've read about it residential family units are the way to go until you get more experienced. There's supposed to be more consumer protections and such. Residential is all the way up to 4 unit properties, if you're self managing, 4 tenants is more than enough tenants to learn the ins and outs of being a landlord.
New York City, NY · Member since 2015 · 40 posts · 7 votes
10y
Justin,
I agree with Samarn. I would cut your teeth on a Duplex, Triplex or Quad first, get experience managing and landlording, then venture into a small commercial investment. If your current situation allows, you could even house hack the Du, Tri or Quad with a 3.5% FHA loan and get a really nice start in your RE career.
I've always been the most interested in commercial midsize multifamily investing. Want to get into the game in the very near future. Is it possible to start with small to midsize commercial multifamily properties? Pros cons, if it is even possible at all? Recommendations? Thanks!
We are probably typical. We purchased a four unit, like the business, liked the promise of a larger unit so two years later we purchased a 16 unit. That was 10 years ago and we are at 81 units now.
You can start at mid-size but you might run into finance issues as your lenders might not be comfortable if you don't have experience in the business. If you run a duplex, tri or quad for a year or two you can show off your chops and comfort the lender. At least that is what worked best for us. Once we reached 32 units, we were viewed as savvy multi-family operators. We financed two deals last year and had banks calling us to give us loans!
Ann Arbor, MI · Member since 2008 · 90 posts · 20 votes
10y
I'd also love to hear more about your success @Douglass Benson. I'm having a hard time finding a deal. I'd love to hear about how we're you successful starting out.
I've always been the most interested in commercial midsize multifamily investing. Want to get into the game in the very near future. Is it possible to start with small to midsize commercial multifamily properties? Pros cons, if it is even possible at all? Recommendations? Thanks!
From a lending point of view, it is important to have a track record. Think of it this way, if you want a lender to loan you 5 million on an apartment building, they are going to expect you to have a successful history. I would recommend partnering up with some one with this track record to get there.
Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes
10y
@justin
@Justin Lewissure it's possible to get into the multifamily properties. I'd immerse yourself with multifamily books as well as start studying successful multifamily investors and their companies.
@Hassan Muhammadmentioned a good book that I recommend too. Another one would be Complete Guide to Buying and Selling Apartments by Steve Berges. Craig Haskell has a good book on re-positioning properties too.
Investor · Mason, MI · Member since 2014 · 151 posts · 152 votes
10y
To the folks requesting - thank you for the requests. I hope you find this relevant to what you are looking for. I honestly think you will be bored with all this but I talk about apartment investing and our start on my website. If you go to this link - https://www.eskerproperties.com/about.html
you will be able to view a presentation I gave around five years ago as a part of a fundraiser about apartment investing. We had just put units 33 to 44 under contract and we were the only folks doing apartment investing at the event so we talked for a bit. Today we are at 81 units having purchased a 20 unit building in May and a 17 unit in October of last year.
We basically started like everyone else does. We flipped a house or two, purchased a four unit, learned the business a little, then starting trying to grow - first a 16 unit, then a 12, then another 12, then a 20 and then a 17. All during the time we were buying and holding apartments, we were flipping houses. This provided us dollars for upgrading the buildings and purchasing new buildings. The last building we purchased, investors providing the down payment and a bank provided the purchase dollars. No money of mine was invested and I own a beautiful 17 unit as a result.
I don't know what our competitive advantage is or if we even have one. We enjoy the business, we are proud of our buildings and we don't intend to sell any of them. Cashflow is the #1 goal and we only invest in buildings that we would be comfortable having our daughters live in. So far, that has worked fairly well for us.
Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes
10y
@Hassan MuhammadI am in Cincinnati and I'm not sure where to buy the book cheaper. I'd search on Google. I can't remember where I bought it but it was about $20.
Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
10y
@Justin Lewis
Welcome to Bigger Pockets. It is a good place to connect with real estate professionals and to learn about real estate. For example, you set up key word alerts. http://www.biggerpockets.com/alerts
Investor · Seattle, WA · Member since 2016 · 73 posts · 37 votes
10y
@Douglass Benson, that was a great presentation. I'm looking to branch into multi-family and you had a lot of great tips in that video! Thanks for the link.