Multifamily Dwellings - What to know before you buy

[Anthony Pace]

Hey Investors,

I have a question for all of you multifamily landlords out there. I have completed a few flips, some patch and paint and some are complete renovations. I have also bought a handful of rental properties that have been doing well. I want to move on to multifamily dwellings. In Baltimore City there are deals that range from 3 units to 20 units. I would like to start with dwellings that range from 3-5 units. Any suggestions on what to look for when doing my underwriting. IE Zoning, utilities, permits, finances, etc. I always try to look before I leap and would love to learn a trick of the trade before I take the leap of faith. Thanks everyone, cheers!

[David Wright]

@Anthony Pace - From a commercial lender perspective Anthony I would suggest the following things to consider, if you will need financing:

1.  Get a quote from 3 commercial lenders and compare not just the rates and points, but also the terms.

2.  Be sure to have a down payment (just in case) of 30% to 35% plus closing cost and reserves.  I know there are many lenders that will tell you they can do 90% to 100% financing but just be prepared.

3.  Avoid any lenders that will require you pay a fee upfront for them to work with you.

4.  Consider the pros and cons of using a Broker vs a Direct Lender.

These fours things should help you in the financing area.  I wish you the best.