Finding & Funding your Multis

[Dassi Lazar]

So the past 2 years I’ve accumulated 19 SFHs as rentals and my husband and I have full ownership.

I'm ready to start with multis however I am not finding the same returns as I have on my SFH.

1. How are you finding your multis?

2. How are you funding them? I love owning 100%. Do you use hard money and refi out.. Hard money as down payment and refi out...

Love to hear how you are doing it. Any questions in SFH rentals I'm more than happy to answer 😊

[Michael Ealy]

Originally posted by @Dassi Lazar:

So the past 2 years I’ve accumulated 19 SFHs as rentals and my husband and I have full ownership.

I'm ready to start with multis however I am not finding the same returns as I have on my SFH.

1. How are you finding your multis?

2. How are you funding them? I love owning 100%. Do you use hard money and refi out.. Hard money as down payment and refi out...

Love to hear how you are doing it. Any questions in SFH rentals I'm more than happy to answer 😊

 Congrats on having 19 SFRs and you're right in aiming your sight to go with MFH. I own both (about 1,000 apartment units and a "few" houses) and although houses are great, the cashflow and capital gains I get from apartments are significantly higher than houses.

So to answer your questions:

1. How to find deals - I find my deals OFF-MARKET (even though I am a licensed agent). Because of my track record and reputation, people forward me deals. Wholesalers, brokers, private sellers forward me deals. Today, a probate attorney forwarded me a 48-unit building that just finished the probate process and no one else knows about the deal but me.

2. How to FUND the deals 100% - meaning, you don't have any equity partners, so you don't want to go into syndication. You can do that by finding private lenders. Network at your local REIA, your chamber of commerce, etc and find people who would rather earn 8% on their money in a safer way than earning 1-2% from banks and risking losing it in the stock market. Then once you stabilize the building (increased the rents and decreased the expenses), you can refi your private lender out and do it again on another deal.

Having said the above, with private lenders, you can probably scale up to 50 units or even 100. But, if you want to play in the "big leagues", syndication is the way to go. You give up a chunk of your ownership but 50% of $20M is better than 100% of $200,000, isn't it?