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Updated about 8 years ago,
Advice on two multi-family properties I'm looking at.
Hello All! My name is Bryan. I am a CPA in Missouri and currently work for a large corporation in the St. Louis area as an internal auditor. My wife and I just joined Bigger Pockets and are wanting to get started in multi-family property investing for the long-term. Our short-term goal is to replace the income she earns working as a Property Administrator for a large/national commercial real estate services firm. Like I said before, we are just starting out. We've both read the Bigger Pockets Ultimate Beginner's Guide as well as a book we purchased on investing in duplexes, triplexes, and quads. Just for grins, I searched for multi-family properties within our area and I found two 4-unit properties for sale. Each property was built in 1977, are listed for $180,000 (each), and the listings state that the properties are fully rented out/have great cash flow. In addition, the listings state that a Net Operating Income Analysis is available for each of these properties. The listings also state that property management is available for each of these properties. Lastly, I should mention that these two properties are right next door to one another and have each been listed for sale since February 2015.
I was drawn to these properties because with some hypothetical scenarios I have put to paper, one of these properties could nearly replace 100% of my wife's W-2 income (although she plans to keep working for the first 1-2 years of our real estate venture). So I've already imagined how much our life could change by purchasing both of these properties. However, with opportunity there is always risk as well and that is why I am here. I don't want to jump into any decisions based on my daydreams! With being a beginner, am I too ambitious by looking into staring out with 8 units? I also wanted to ask for some feedback and/or advice from seasoned investors about questions I should ask and things I should look into/be aware of before making any decisions. As of right now I am strictly in the planning and analysis phase. I want to contact the realtor with a list of questions related to the property and my wife and I plan on driving by the properties later to day just to get a good look at them and the area they're in. Here is my request list for the realtor so far:
1.) Request the Net Operating Income Analysis mentioned in the listing.
2.) Inquire as to why the properties have been listed for so long.
3.) Inquire about the impact on the properties from the most recent flooding in the area (Dec. 2015). It seems like it is far enough away from the areas that were under water, but I'd really want to be certain.
4.) Ask about the tenants and if there are lease agreements. I'd also ask if copies would be made available as part of the purchase contract for review before closing.
Please let me know if there is anything I am missing or if there are any additional questions/concerns I should raise? I am also curious if we'd be able to take a look at the inside of the properties given the fact that each property is currently rented out. I know tenants have rights, and I wasn't sure if looking at the inside is allowed. Could someone please provide some insight regarding this matter? I am looking forward to receiving your feedback and honest opinions. Thanks!! Here are pictures of the two properties from the listings.