All Forum Posts by: Omar Ruiz

7 cap

I don't think many subprime loans were made on small multifamily because the down payments would have been higher dollar and I don't believe subprime loans were available on apartments because that's the commercial space. 

What I experienced as a property manager was that people in the construction trades were losing their jobs and needed to move out. As shadow inventory from housing increased rents had to adjusted to be competitive because apartment units were now competting with the glut of homes on the market. Some people were not paying mortgages on houses they had as rentals and collecting rents in order to have some income because they were going through financial hardships. 

Apartments owners that were overleveraged and didn't operate their properties well, lost them to foreclosure. If they didn't adjust to the market and had a hard time keeping units occupied would have difficulty making mortgage payments or taxes and insurance.   

Chase is pretty good with smaller multifamily. I don't know if you need an entity, but you should have one anyways on each multifamily for asset protection. I don't believe you necessarily need to have it setup before applying but notify your lender that title will be held in an entity. This is normal with bigger properties using agency financing.  

Cashflow Game Workshop!

I'll be hosting a Cashflow game in our conference room on Saturday, 10/1/16 at 1:30pm. 

Cashflow 101 is an educational board game designed by Robert Kiyosaki (Author of "Rich Dad, Poor Dad"), which teaches players concepts of investing by having their money work for them in a risk free setting (play money) while simultaneously increasing their financial literacy and ability to decide if investment opportunities make sense. You'll have fun meeting like minded people interested in learning more about investing and learning in a safe fun atmosphere. To Lear More Click Our Meetup Page Here

Kareem, let's talk. Send me a message.

The best book I've come across for multifamily is "ABCs of Real Estate Investing" by Ken McElroy

Because they're all duplexes will have to get residential loans separately  but you may be able to get what is called a portfolio loan  that will put them all together into one loan .  The only issue with that  is that it will make it more difficult to sell them individually in the future.  This is a question that you need to consult with an experienced mortgage broker  then maybe even somebody on the commercial side of it . Another option  is to ask the seller  if he will provide seller financing says he has no date on it .  That will allow you to refinance them into individual residential loans over time  and pay back the seller

Congratulations

Most big multifamily are master metered, but if you have individual water meters and the tenant doesn't pay, the water gets shut off. 

I've been a property manager in Riverside since 2007 and buying multifamilies since 2010 and experienced the housing recession first hand. The window of opportunity to cashflow in Riverside multifamily has closed as the market has recovered. It's in the later stages of expansion in the market cycle and considered a sellers market. You may be able to cashflow in the mid-single digits. Deals seem to be trading from 6-7cap. If you see an 8 or 9 cap, be cautious - do your numbers accurately and visit the neighborhood. 

Multifamily and apartments are a desirable asset class, that tends to have buyers overpay. Yesterday an agent emailed his listing that sold for $103K per unit in San Bernardino - they were mostly bigger 3 bed units built in 1987. I sold a sixplex last year of all 2 beds for $83k per unit in San Bernardino, built 1957. The last multifamily purchase I did was in 2013 and it was shortly thereafter that values spiked. Since then I've been buying out of state.