Buying Turnkey Multifamily Properties

[Roman Serebryakov]

I have noticed there are quiet a few of MFH properties on the market, mostly duplexes, on sale that already have tenants in it. Also some of these properties have remodeled rooms and exterior. I guess I am wondering if it's a good idea to invest in these established properties? The prices are fairly high, of course, there is not much wiggle room there, I think for the fact they are already in fairly good shape. So, is it worth pursuing deals like this? And why do these property owners decide to sell something that is bringing them money from rent? Does it mean there is something wrong with that property or neighborhood? Most of these properties are found on MLS or though the list I receive from realtor.

Just trying to gauge an idea what would stop you from buying into opportunity like this and what are the risks. At this point it seems unlikely to to BRRRR just because the property is appraised fairly high already. What are the advantages and disadvantages in this course of action?

[Lamont Chen]

@Roman Serebryakov

For multi-family properties generally I look to purchase distressed units with below market rents. That way when I fix it up and get tenants in to market rents I have added equity in the property. This is especially the case since 2-4 unit properties are investment the ROI is important for buyers and that is a high deciding factor in the overall sales price.

Someone whom is selling a "turnkey" property could be looking to get into a larger deal through 1031 exchange, retiring from REI game, flipping, etc.

Nothing wrong with purchasing a turnkey MF just little harder to force appreciation but probably easier and less headache.

[Roman Serebryakov]

Originally posted by @Lamont Chen:

@Roman Serebryakov

For multi-family properties generally I look to purchase distressed units with below market rents. That way when I fix it up and get tenants in to market rents I have added equity in the property. This is especially the case since 2-4 unit properties are investment the ROI is important for buyers and that is a high deciding factor in the overall sales price.

Someone whom is selling a "turnkey" property could be looking to get into a larger deal through 1031 exchange, retiring from REI game, flipping, etc.

Nothing wrong with purchasing a turnkey MF just little harder to force appreciation but probably easier and less headache.

 Makes sense to your point! What is the best strategy you apply to find the best duplex deals off-market? 

[Jonathan Oh]

@Roman Serebryakov There could best multiple reasons why owners sell MF such as 1031, cashing-out to invest in other assets, tired of managing, etc. Question is, does the deal make sense for you? Everyone has different circumstances. As long as the deal works for you, that's all that matters.