All Forum Posts by: Beau Fannon

Chris, there is a big difference in financing a duplex versus financing a small apartment complex. Financing a multi-family building with four units or less uses the same process as buying a single family home. However, an 11 unit apartment building is a commercial deal. You will need much higher reserves, much higher down payment, and rather than running your credit to prove credit worthiness the lender will want to know your global cash flow situation. It's a whole different ball game.

What works best for you depends on your specific situation. Will you be buying your multifamily rental property in the town you live in? How fast do you plan to build up your portfolio? 

If you are purchasing in town and it's going to take a year or two between acquiring properties, then manage your first property yourself so that you understand how things work. There's a big difference between being a renter and being self-managing owner. I promise you will find the experience very beneficial.

If you are purchasing out-of-town or you plan to scale quickly, hire a property manager immediately. Once you acquire your second local property hire a property manager. Like people have said before, your time is better spent scaling your portfolio.

I've been running a lot of comps & calcs and I'll tell you that a 30% down payment on a SFH won't guarantee a positive ROI.

There isn't an easy solution. You need to know the neighborhood you are interested in. I use the map feature to get my baseline data then backfill info for targeted properties.

I know a group I can introduce you to. Check your inbox. 

 Cashflow should always be considered along with many other factors. Different parts of Texas have drastically different economics. Here in Austin, the bigger the project the better the cashflow. Can you tell us what you are looking to invest in so we can give you some better guidance?

 I appreciate the offer but those of us in South Austin with children will never be able to make it up there. It'd be nice if we had something in downtown or south of the river.

Is this up by Cedar Park?

I heard about that suggestion but it would negatively impact too many people who are self employed so I never saw that it went through. 

With the changes to how credit scores are computed after 2008, many people who are financially solvent still have lower credit scores because they do not know how to game the system. I dare say that the majority of people who follow Dave Ramsey 's financial philosophy have lower credit scores due to a lack of utilization and yet their goal is to buy a house with cash.