Purchasing 2nd investment property - a Multi-Unit!

[Joseph Davis]

We purchased our first rental last year & am now looking at purchasing a multi-unit, preferably a 4-plex. Our bank will let us purchase 1 more investment property with 10% down and no PMI, thus the reason for the 4-plex. I want as much leverage as I can, while I can.

 We are going to have a property manager priced into the deal at 10%.  This way, if I choose to manage it myself  I can go back to a property manager at a later point and still have positive cash flow.  The current manager we have is working out really well so we are pretty happy.  We are looking at the following criteria:

1. 20% equity upon purchase

2. 15% cash on cash return

3. At least $150/door positive cash flow after all operating expenses.

Beyond our normal due diligence, what other things should I be watching out for when buying a multi-unit versus a single family home?