Multi Family Questions

[Franklin Bird]

Hi all,

I’m brand new to real estate investing and hoping to escape my analysis paralysis by connecting with fellow investors, lenders, brokers, and property managers interested in the same area(s) as me as well as starting to actually analyze deals.

I’m currently looking at 5-10 unit properties in Reno, NV as I’m based in the Bay Area and it would be nice to be able to drive out to see properties and meet agents/PM’s etc. I am open to looking at other geographical areas, however.

I have a few questions:

- I understand that there is a difference between seeking a loan for residential multi-family (< 5 units) and commercial (5+ units). Can someone confirm/deny this for me? Are most commercial lenders looking for someone with investment experience?

- However, I've also heard that the commercial properties will be valued using NOI and cap rate whereas the residential ones are more based on comps? Is this true? If so, this makes me thinking I'd want to seek out a 5-10 unit property as I have a bit more control over the value through rehab and cost-cutting.

- Does anyone have any recommendations for agents or property management companies in Reno? Anyone with experience doing multifamily investing there?

Thanks in advance! Looking forward to connecting with people - it’s my favorite part about BP.

Franklin

[Diana Muresan]

If you don’t currently own residential MF, i would not jump into a commercial loan, also you might not qualify. You can get your first MF (4 units max) with min downpayment, 3.5% down payment or 5% down on FreddieMac HomePossible. On commercial market your downpayment will be 20-25%, you will also need to have the same net worth as the loan amount, plus rate is an arm or ballon and closing costs much higher