All Forum Posts by: Michael Badin

Here is a link to an old Forum post with lots of good info on what you are looking for.  Read through the post and you should find what you need.

What are the Top Questions to Ask When Offering on a Multifamily?

How are you only putting 3.5% down? That seems like a very unlikely scenario. Do you already have financing in place?  Most investment property lenders require 20-25% down at a minimum.

First congratulations. Second, you are not very clear as to what you are asking. 

Have you already made the deal and done your due diligence and want to know what the prior owner needs to transfer to you at time of sale?  

Or are you still in due diligence mode and need to know what to ask the owner for so that you can properly evaluate the property / deal?

You may also be interested in reviewing reports put out by CBRE that can inform you about market CAP rates, they do C-Class Properties as well. You can subscribe to the reports they put out and get them sent to your email or just login to the site and pull them up, they are free.

@Luis Valdez

@Nathan Platter is correct.  However there are tools that can assist you in evaluating a market.  There is almost always a market that it is a good time to buy it's just knowing the correct market.  

https://www.yardimatrix.com puts out some good reports on markets that can help determine overall interest. Once you have determined that you can look at a more detailed local report for that specific market from Marcus & Millichap. You may also be interested in reviewing reports put out by CBRE that can inform you about market CAP rates. You can subscribe to the reports they put out and get them sent to your email or just login to the site and pull them up, they are free.

If you already had a property, and owned the land free and clear maybe... however the cost to build is much greater than to just buy.  Like @Peter M. said, unless you are a builder that can do it at cost it would be difficult to see how this would be profitable. (For such a small unit.)  There are of course people who do it every day but for your first property, it's probably not the best course of action.  Most builders are only able to make a profit because they build many homes at once and get materials at a steep discount due to the quantities they order.

It's not like flipping, where the property is there are you are just improving it, you will have many costs such as connecting the property to the local utilities which could be inexpensive but can also be (more likely) crazy expensive, it all depends on the land you purchase and the proximity to current local utilities.

The lure to jump in can be hard to resist, but take your time and find the right property.  If it is not available in your local market, research other markets to invest in. 

Just my two cents, good Luck!

You could also form a trust where all three of you are trustees. You and your brother can start running it immediately and you will not lose the step up basis on the capital gains, and when your father passes (hopefully many years from now) he leaves his ownership to you and your brother within the trust.

If you require the tenant to remove the security cameras and something were to happen at the property you could potentially become liable for providing unsafe conditions.  As others have said the security cameras make the property safer, by removing them you make the property less safe.  This would be your requirement and thus opens you up to liability / lawsuit should something occur.

Further, in my leases i have a provision that should the tenant make any alterations / upgrades to the property that are permanently attached to the building become part of the building and thus the property of the landlord.  My tenants are required to obtain my permission to make alterations first, however should they proceed without permission, the provision is still there.  Security cameras are an upgrade to the property.  If you have a provision of the sort I would have the tenant provide you with access to the security feed and keep them on the property.

First, congratulations on your new property. 

There are many ways to accept rent.  I don't recommend cash because there is no record of it.  It can become a he said she said situation. 

Currently I have some tenants that mail me checks (I am trying to phase this out) but some older folks are just more comfortable with what they know.  

Some tenants go directly to my bank and deposit their rent directly into my account.  With my Bank they don't need an account number to do it, they simply state they are depositing their rent into my business account and provide the business name.  Never had a problem. 

What I am trying to get all my tenants to do (and most do already) is pay online.  I use the Cozy site, it's free and is easy to use.

Yes it can be.