New to Real Estate · MELISSA, TX · Member since 2018 · 32 posts · 6 votes
Hi Everyone,
I have been on Bigger Pockets for couple of months not actively, but I am making it goal to be more active. I am looking to build my company's portfolio thru real estate investments. I first wanted to start with whole sailing, but honestly I feel like everyone is whole sailing which is fine and another tool as an investor I could use, but I do not want that to be my bread and butter. So, I have been reading the book "Crushing it Apartments and Commercial Real Estate" By Brian Murray and good read I made add and find myself gravitating more towards Multi Units for passive income instead of SFH. After listening to Bigger Pockets podcast show #227 with Joe Fairless that light bulb came on and I realize this is the space I would like to immerse myself into. So my question is, how did you determine your criteria? I have 2nd home and Florida that I is owned free and clear. I am thinking about doing HELOC on the home, use the HELOC to invest into multi units preferably 10 to 20 units. All feedback is welcomed.
Specialist · IL · Member since 2018 · 47 posts · 42 votes
7y
@Amir Estimo. I also lIke multi family for many reasons. For our portfolio, they bring a higher return, and more consolidated management.
I like leveraging equity to expand into more properties, but recently spoke to a friend who is using a combination of equIty and other fInancIal instruments to generate more cash-flow, capture interest, and control cash.
He is in Texas, and would be happy to make an introduction if you have interest.
Rental Property Investor · Tampa, FL · Member since 2015 · 1k+ posts · 969 votes
7y
Hi Amir,
Multifamily is a whole different animal, so it is good that you are already working on your education.
In regard to criteria, it depends on your goal. First, I would pick an asset type: distressed, value-add, or turnkey. Each of those asset types have different investment criteria. For example, the general criteria for a value-add deal are in or near a major city, built between 1980 and 2000, and has an opportunity to add-value (i.e., make physical or operational improvements to increase the rents).
Then, reach out to real estate brokers and tell them what type of deal you are looking for. Then, you will need to set return criteria. That is, what return factor and what figure is a good deal to you, which is based on your overall income goal. For example, your investment criteria may be a cash on cash return of 8% or higher.
Congrats on getting into the Multi-family game. It sounds like you have a solid plan. Continue to invest in yourself. Are you planning on managing yourself or having the units managed? There are pros and cons both ways but it will be important to know what those are before you purchase a property.