Hi,
My (future) business partner and I are looking to buy our first multifamily and and are looking for some guidance on how to get started.
We both live in Philadelphia and are looking mainly in New Jersey for already rented duplexes/triplexes. Our ceiling for price is 200k. There seem to be a good number of cash flowing properties in the 175k-200k range.
Both of us already own individual primary residencies, we're both engineers with relatively high paying, stable jobs that we plan on keeping for the forseeable future. We have both done major renovations to our properties, so we are relatively well versed in home upkeep.
We are looking for guidance on how to get started with the financial side of things and wanted to see what the experts has to say.
We plan on going in to this deal 50/50. We expect to need approximately 25k each, 50k combined, to purchase our first 200k property, and are hoping to roll as much closing cost as possible into the mortgage.
My partner has his needed 25k in cash now to get started. I have some available cash but I would like to leverage my currently property. I have enough equity to take out a 25k HELOC for my half.
Our initial thought is for us to form an LLC and apply for the mortgage that way, once we both have the money secured. We know that for a new LLC the mortgage company will need us to personally certify that we can repay the loan. We wanted to make sure that was the smartest way to go about it.
In addition, we are thinking about what we need to do with the profits we would be making off the property, with the intention of eventually buying more. Our target cash flow is 1000 a month, and the goal is to funnel all of that money in to the LLC in terms of an emergency fund and then to begin saving for the next investment property.
We'd love to hear feedback on our plan and will gladly take and suggestions. Thanks.
