All Forum Posts by: Quentin Mitchell

The 2 examples I gave was from 2 different states.  Which state will not matter - as long as bank of the buyer is willing to treat such deals as commercial (package of more than 4 units - with more than 1 building involved in the transaction).   The bank is more likely to accept it as package if buildings are next to each other.   

To get around 'value is based on comps and not income being created', one potential is to buy/sell multiple 2-4 units next to each other.  For example, I have a 6 unit building where each unit is individually deeded.  Since I own all units in the building, it is being treated as 6-plex and value as such.  Last year, I sold 3 duplexes on the same street (next to each other) and buyer treated them as 1 commercial investment (with single loan) where price was more income based.

Is that based off state by state or is that all states?

I'd say this is a pretty solid assessment. If you can use a VA loan, you'll REALLY be maxing out your opportunity.

to me, the larger issue is 'value is based on comps and not income being created.' 

Because 4plexes are large enough that 'investors' want them, but they're not being valued like 'commercial invesors' value their traditional properties (NOI & Cap Rate). So you can get tied up there.

I also disagree that they feel more homey than an apt, to me they're the same. But to each their own :)

Great write up!

Agreed with your points.

I agree that 2-4 unit buildings can offer advantages over other investment classes, but it all depends on your goals, experience and expertise. They certainly offer scale above SFH.

What I think is one of their most attractive benefits is that you get a quick education in dealing with multiple tenants simultaneously, people whose lives and actions impact your other tenants. This can be helpful to build an understanding of "how people work" and give you ways to learn who your customers are and what expectations they have. In my day job as a marketing professional, getting to know your customer is a central pillar to building a successful brand or marketing campaign. Works the same in real estate investing.

That is a great point! The experience is invaluable and you learn very quickly.

@Quentin Mitchell I was trying to figure out why you are asking this question. Is it because you have both tenants? 🤔 

For me, I'd prefer to have a tenant who pays on time and keeps the place clean 😊 

I thought you looked familiar:) 

I at least got your thread back to the top. Maybe we should talk offline sometimes you made some good points. 

Happy New Year 

Sounds good just DM me.

@Quentin Mitchell I take the early paying tenant every time. Here is why. Even if they damage the property, they will pay the bill when they move out. The tenant who pays late every month is just one car repair or lost job away from not paying you a dime. And after they stiff you, good luck collecting anything.

After you have enough tenants, you just know how the story ends. 

Yes I do that is why I opened up the discussion to get different views is all and even though I said maintence I do my due digligence before anyone moves in, so that is not the situation.

@Quentin Mitchell

On-time payments aren’t a fiction at all if you require it and screen closely. Set yourself up for success with appropriate systems, and when a hole is discovered, plug it!

Spit shine on the counter: optional.

Rent paid by noon on the 1st: not optional.

That’s my answer

I agree to get paid, screening and systems and all that as well, I was saying that if this was the case. This is not a real life situation for me just a little hypothetical.