All Forum Posts by: Nathan A.

Welcome! It's great that you already own a multi-family property. I would encourage you to think about your specific goals and constraints and then start identifying strategies that could help you take things to the next level. For example, do you want cash flow? Do you just want to invest for appreciation? How much money do you have available to invest in your next property? Do you have more money than time or vice versa? If you currently owner-occupy your 3-family, are you willing to move into another owner-occupant situation to get your next property, or not? All of those questions will help you choose between strategies (like buy-and-hold, wholesaling, short-term rentals, flipping, BRRRRing, etc.) and narrow down your criteria for what to start looking for in your next property. Good luck!

One place to start is Dave Meyer's list of the best cash-flowing markets. The spreadsheet that goes with the article has data on the top 100, not just the top 10. I would give major weight to markets you already know in some way (for example, maybe family or friends live there and you've traveled there a lot over the years). Once you have a few ideas of markets in mind, you could perform a more detailed analysis looking at things like population growth, employment and crime.

Since you're also talking about moving to your target market yourself, also make sure it's somewhere you personally are interested and excited about living! Consider taking trips to a few cities on your short list to get a feel for them before you decide where you want to live. And don't be ashamed of moving to your target market and renting for a little bit at the beginning while you get to know the exact neighborhoods, get a feel for what's on the market and build your team.

1) Yes, multi-family properties are sold by the property, not the unit.

2) Ask a local insurance agent or get an online quote.

3) What you want to do is figure out what the market rent is in the area, which you can get a quick general sense of from rentometer.com or the BP rent estimator. A better way is to browse Zillow rentals and look for nearby properties with the same number of bedrooms and bathrooms and in similar condition. The market rent isn't necessarily what the current tenants are paying -- sometimes the current tenants are paying rent that's below market and you'd have an opportunity to raise rents after a purchase.

4) Lenders generally won't look favorably on people loaning you money to make a down payment, because they don't want you to be overleveraged. Gifts to help with the down payment are generally OK, but I wouldn't count on being able to use loaned money for a down payment.

It's great that you've done so much reading and listening. I would recommend that you get good at analyzing potential deals. Also, start thinking about things you have time to do and are willing to do that could provide value to those you network with.

Quote from @Ben Kagel:

Is it too risky to execute on a deal that won't cash flow after I move out likely after a year? I'd probably be gambling on appreciation, refi after a decrease in interest rates, or forced appreciation / rent increase via doing a rehab the first year.

I think you should treat negative cash flow as a serious concern if you think it's likely you'd move out that soon. Forced appreciation and the other ideas mentioned of a short-term rental strategy and negotiating the purchase price are all solid ways to try to prevent negative cash flow. Do you have the option of staying in the house hack longer than a year if the numbers aren't looking good to move out? As you say, counting on appreciation or a change in interest rates amounts to gambling. Yes, it's more important to get in the game and learn than to hit a home run on your first property, but having to subsidize your first property from your W-2 income for a couple years if the gambling doesn't work out is tough. I would try as hard as you can to avoid that.

“An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” -- Benjamin Graham

BiggerPockets has a directory of property managers that could be one starting point. Here's some good blog posts on interviewing property managers:

* "76 Eye-Opening Questions to Ask a Potential Property Manager"
* "How to Find and Hire the Right Property Manager For Your Rental Property"
* "How to Choose the Right Rental Property Manager"

I would think of a "dwelling unit" as the set of rooms that all have the same front door with a lock.

If you live in your house initially you can get owner-occupant financing, which could get you a better interest rate or lower down payment.

$200 out of $1300 (15%) seems too low to cover vacancy, repairs, capital expenditures, management, lawn care and any landlord-paid utilities. That said, your plan to do 10-year rather than 30-year financing is really a key factor here in the cash flow. I would also pencil it out with a 30-year mortgage and if the deal seems to make more sense to you that way, the deal itself is probably solid.

Can you steal ideas from listing photos of fixed-up houses in your area? Or go on houzz.com and browse the photos?