All Forum Posts by: Ben Leybovich

You should be listed as Co-Insured and provided with a copy of statements showing PAID. Good Luck,
Ben

Sean,

I have to agree with Don that the strategy determines the vehicle. I will say that personally I prefer multi-family properties, and I own both. I do not generally flip, and I do not buy property in hopes of appreciation which may or may not come to fruition. I buy revenue streams represented by buildings. There are a few things to consider:

1. When we speak of value, the SF world is very different from the multi. In SFR the value is set by the comps. That's it. This doesn't offer a lot of opportunities for expandability. On the other hand, multi property is valuated based on income, so there are plenty of opportunities to improve the value by improving the NOI.

2. It is true that singles tend to attract more long-term tenants. Why? Because they feel like a home and not just some place to stay for a while. Can you accomplish this with a multi? Yes – you have to chose the right property.

3. Where I live, the rents I receive for good apartments are practically the same as SFR. However, I can buy apartments for a third less per unit. For instance, I have a 10-plex under contract as we speak for a bit under $375k. That's $37,500 per unit. Each of these rent for around $600. Half a mile away I have a single which rents for $650. I paid about $40k for it and spent $15k on the remodel four years ago. Today, that single would have cost me $30,000 but I likely would have had a bigger remodel…

4. I can replace a roof on a 10-unit for quite a bit less than on 10 individual SFR.

Bottom line, there are benefits to both. If the stars line up and a really great quick flip opportunity presents itself – sure, why not. But long term – multifamily is more stable and more predictable in my opinion.

Jeff,

This deal sounds too skinny in my opinion. 18k of potential profit relative to the risk you are assuming is just not good enough. And here’s the bigger issue, most experienced investors will tell you never get into a deal unless you have 2 or 3 exit strategies. It sounds like your only plan is to flip – a lot of things can go wrong with that plan, and then what. Can you rent this property from enough to cover yourself? Be carefull!

Ron,
75% LTV is the highest banks will go at this time, and likely no more than 70% for a new investor (they want you to have skin in the game). They may allow owner financing, but likely not the entire balance of the purchase price.

If you have access to capital, one option is to involve an investor/partner to buy the property for cash and then refi. with a bank note. For the refi. the bank will go off of the appraised valuation. If you are getting the deal cheap enough, and if you have ways of improving the NOI which will result in a higher capitalized value at the time of refi., this may create enough spread to cover all of the costs of purchase. Do the math.

Another option is to get a partner for the amount of the down-payment. In this case, the money your partner brings to the table will be considered equity (you are not borrowing it unlike in the case of owner taking second.) Banks really do look down upon what they know is an 100% financed deal! But with your partner's money, to you this would be a $0 down deal. You need to be careful as to how you structure a partnership like this. Talk to a good CPA an Att. Hope this helps.