All Forum Posts by: Ian Korpel

Hello BP. I am looking to get into multi-family rentals and may have stumbled across an opportunity (or liability). My original plan was to purchase single family properties for a few years and use the rental income to save towards a multi-family, then sell the single-families. Ideally, I would have a complex with a dozen or so units in 5-10 years. My thoughts here are that a multi-unit building would allow me the capacity to hire a property manager and minimize my workload with multiple single-family units.

Now, I was chatting about this with my family and my mother said she is very interested in investing. Obviously, I am cautious of this since I hear a lot of horror stories, so I would have a legal contract written. My question for the community is if this is something worth pursuing? In my mind, I think it would be foolish to turn down cash aid which would allow me to "skip some steps" of finding single family home deals, and I could jump to the multi-family plan, though perhaps at 4-6 units instead of a dozen to start with.

The way I see it there are two approaches. I could write her in as a business partner for this one property and provide income payments to her as a silent investor at some type of split (45-55) or something like that. Or, I could take a loan from her, and pay her back interest plus principle over 3 years or so, which would leave full ownership of the company to me after that time. 

Now, full transparency, I do not yet own any investment properties. I was buying a year ago but had to postpone due to a baby coming into the picture and had to be (understandably) conservative with my savings. That is another reason I am interested in a multi-family with a management company (if the numbers work of course). 

So, I ask the community. Feel free to be fully honest with me! I am obviously new at this and you won't hurt my feelings!

Best, 

Ian

Hey Robert. Most of the replies here seem to be from people that have made that leap and come out the other side. I am in the same spot as you my friend and just discovered the community. I completely understand your fears and share them. I am currently looking to buy my first rental and found myself stuck at the end of the "analysis" process. Multiple properties seem to cash flow well, I just can't make myself stop worrying about little things like: (bad tenant, getting sued, negotiating, bothering my realtor, how finished the property is, am I getting taken, etc. etc. etc....) However, it seems like at the end of the day, all of the advice here is to take the leap. If I end up failing, then I will have learned what NOT to do and hopefully do better next time. I don't know if this helps you or not but I just wanted to let you know that YOU ARE NOT ALONE!

Keep at it!

Hello. I am looking for some general opinions on purchasing a duplex in a flood plain (A). The property had about 8ft of water in the basement 4 years ago and likely will again in the next decade. Each side is a 2 bd/1ba, but the basement can never be finished to turn it into a 3bd/1ba. The Cash-On-Cash ROI (including flood insurance) is about 30%. This is my first property so I am unsure about other issues such as long term water damage, tenants having damage to possessions, damage the insurance won't cover, resale, etc. It's listed at 190K but my plan is to lowball and see what happens.

I am hoping to be a buy and hold investor and will self manage. But since this is my first property I wanted to put the question out there to the community. Would you ever buy a property with this history? What should I be looking out for? What questions would you ask in a walk through? Should I not even consider this challenge as a newbie?

Thank you all!