New member from South Florida

[Daniel Heller]

Hi there,

I'm new to this group and real estate investing in general. I live in Miami, South Florida, and am looking to get into the market. Not as a get rich quick, but rather as a slow and steady accumulation and growth of properties. I have another full time job as a physician and am not interested in leaving my practice yet, but I'm looking for something else that will generate a cash flow and allow me to get to financial freedom within the next couple of years so that I can practice medicine on my terms and not on the insurance companies. I have not yet started to invest in real estate, although I am reading and learning lots online and have started to look online for some properties. From what I've read, multifamily seems to be for me. Any suggestions on how to take the actual next step; how to find a good real estate broker who will understand what I'm looking for and be able to help me learn the ropes? And then any tips on how to evaluate a property? 

Any and all suggestions are much appreciated.

Thanks!!

Daniel

[Thomas Franklin]

@Daniel Heller Since you are interested in Multifamily Properties, I propose the following. Find an Investor Friendly Realtor. I would suggest that you interview several Realtors and ask them the following questions, to ascertain if they are truly Investor Friendly, or if they are throwing you a sales pitch.

1. How many investors do you currently work with and how many investors have you worked with, in the past?

2. How many transactions have you closed, with investors?

3. Do you currently own any Investment Properties? If so, what type do you own?

When you wrote that you are interested, in Multifamily Properties, is your desire Residential Multifamily Properties (MFRs) such a Duplex, TriPlex, or a Four Plex, or Commercial Acquisitions? Many Realtors will suggest purchasing a MFR using a FHA Loan, to reduce your out of pocket money. If the property requires rehab, the Realtor and/ or Mortgage Broker will suggest applying, for a 203k Loan. A 203k Loan is where the purchase price and rehab costs are rolled into a single loan.

Assuming you have a respectable FICO you can buy, with a FHA Loan (3-5% down, a 30 year amortization schedule, and a residential loan rate). Because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC. What happens if one of your tenants has a slip and fall, on your property, or something else happens to them? You are on the hook and can be personally sued, for everything you own. Some people will say, "Take out a quality Insurance Policy and you will be protected." Ambulance chasing attorneys know their way around and can legally navigate around Insurance Policies. Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.

If you want to close in the name of a LLC, Mortgage Lenders will offer you Commercial Loan Terms (25-30% down, a 15-25 year amortization, and a ballon due in 5-7 years). This is what I am encountering, in the current Mortgage Industry.

If you think you will go FHA, 203k, etc. and then Quit Claim the property, to a LLC, or a Land Trust you run the risk of the lender discovering a Title Transfer occurred and activating the "Acceleration Clause" or "Due on Sale Clause" that requires the loan to be paid in full, within 'x' number of days. These clauses are contained, in all Promissory Notes nowadays.

Many Realtors and/ or Mortgage Brokers will not tell you this information. Many, but not ALL are only focused on the commissions he/ she will earn and not focused, on your best interests. You many be asking yourself what can I do? Locate a Motivated Seller that will consider Seller Financing. You may have to put more money down (10-15%), but you can close, in a LLC, with no worries about banks. I have a lengthy Legal Opinion, from my seasoned Legal Team regarding this matter.

Regarding Property Analysis, you may wish to visit my ACT Investment Properties, LLC Website. When you are at the homepage, click on the tab "Investment Strategy." Scroll down and click, on the photo. A PDF will appear that will show you how I analyze a property, for potential acquisition. This type of analysis is applicable, to both MFRs and Commercial Properties.

If you are interested, in a Joint Venture Opportunity, please let me know. Much to your success!