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Updated almost 6 years ago on . Most recent reply
Tips for buying first multi-family unit
Hello,
I am a very green investor with no experience with the exception of buying my home I now live in. I am interested in purchasing a buy + hold multi-unit property in Indianapolis and would like to get some tips on financing, analyzing a good deal, and anything else.
What are some of the things you wish you would've known when you purchased your first multi-family unit?
All good questions. Why are you interested in a multi-unit for your first investment property?
@Bill Spence..Thanks for the reply. I am interested in a multi-unit because I currently own a SFH and have gotten pretty familiar with the maintenance fees for keeping it up. As I seek to expand my RE investment, I would like to have an asset that can produce more potential cash flow. I've had several investors advise me towards a MFU so I thought I'd seek some other advice as well. Thanks for asking.
Hey @Tim Swain! Welcome to the REI Adventure!
As a wholesaler here in Indy, I think it's great that you want to get started and I encourage MFH for "House Hacking" to start. What neighborhoods are you considering? How are you sourcing your deals? Who are you networking with in Indy?
How much are you looking to spend on your first MFH and what scale of rehab are you comfortable taking on? Are you planning on living in one side/unit of the MFH and renting out the others? Are you planning on financing the project with Traditional financing? FHA/VA? Hard Money? Rich Uncle?..haha I have a colleague who specializes in the 203K loans process if you are wanting to go that route.
Please bear in mind that while yes, MFH can produce more bang for the proverbial cash flow buck because there are more units per property, they also have higher maintenance considerations because they will have more HVAC units, more toilets, more appliances, etc. Then there is also the considerations of making sure the properties have separately metered utilities so you can pass that responsibility onto the tenants, etc.
I know that is a lot of questions. Hope they give you some things to consider. If you would like to talk more, please feel free to send me a message.
All the best!
Aaron
Thank you @Aaron Clements, this was very helpful for me.