All Forum Posts by: Rakesh Battula

@Rakesh Battula All that being said Biggerpockets has a great calculator for rentals that I always use which has never let me down.

Brandon Turner has a much more detailed calculator that he has created for his mastermind group The Better Life Tribe. Brandons two books on multi family investing are also must reads for any investor.

Other than reading lots of books and listening to podcasts I have had no formal training in dealing with analysis and am doing well just with the biggerpockets calculator.

However if I decide to undertake a large multi family I may consider finding a consultant to help me with the analysis and research. I’m currently doing deals between 6-10 doors.

Key factors in analyzing a multifamily deal: The two most sensitive inputs will be your vacancy factor and your cost of capital. A deal could look good assuming 5% vacancy, but bad a 7 or 8% . A deal could look good at 7% interest rate with 25% down, but underperform at 7.5% and 30% down. 

Red Flags: Multifamily is valued based on NOI divided by Cap Rate. Trouble is, NOI doesn't factor in capital expenditures. So keep an eye out for any major improvements needed in the first few years of your ownership (roofs, exteriors, HVAC, electrical rewiring, etc)

Things to know before starting: Make sure you buy at a basis in-line or below market comps (on a per unit or rent multiple basis). Sellers and brokers like to pitch value on income and cap rate to make the deal look good. We can fluff the numbers pretty easily. So just make sure you do a sanity check with comps so you know you're not overpaying based on unrealistic underwriting. 

@Rakesh Battula you can pay for programs, pay for coaches, but if you are truly committed you can learn a lot online for free. And you can pay for all the coaching and programs and still not fully understand what steps you need to take and then take them successfully.

It’s not easy. AND unless you partner with a seasoned Real estate investor who has a SREO no lender with consider you. There are no free lunches in this sub-arena.

Best wishes. And as always just my opinion and not written by Ai.

Hi Rakesh, I own 9 doors across a couple midwest markets. They are a mix of multi family and single family. They metrics I look at are rent to price ratio, history of appreciation and potential built in equity. Would be happy to connect and talk more about my investments.

So happy to hear that you are looking to invest in Multifamily. It is the most tested and true investment model. Another thing I want to complement is that you also know what to look at, first thing is to find a local group in your area. Another option is to YouTube and look at different sources on these questions..

I'm a single family guy, but one part I know a little about is the underwriting. 

I don't think you need to know how to underwrite your own deals, but knowing what commercial underwriting looks like and the metrics mean would be a good place I would recommend starting. 

I would check out the YouTube channels:

https://www.youtube.com/@BreakIntoCRE

https://www.youtube.com/@tacticares

https://www.youtube.com/@adventuresincre

Hey @Rakesh Battula! It's equally important to look at location as it is the physical asset. Some things to consider are job growth, population growth, and surrounding school systems. If the location is home to high job and population growth along with great school systems, chances are you are on to something!

Best of luck. 

Hi Rakesh, if you are serious about learning multifamily and going all-in, then you should get trained.  I did coaching at RE Mentor in Boston. David Lindahl's program will teach you everything you need to know and you will succeed if you take it seriously.  You can start with reading his books (Multifamily Millions) and go to a local seminar when they are in town. But coaching will be the game changer for you.