All Forum Posts by: Samuel Coicou

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I'm currently looking to do the same thing. I live in Midland, MI and I have two duplexes. I've heard that you should diversify our risk by create a separate LLC for each rental property you own. But man, that seems like a lot of extra work come tax season. I think I'm just doing the one for our two properties.

Originally posted by @Account Closed:

In multifamily a very similar value add strategies are used. Multifamily properties are valuated based on the income that the property generates. If your renovations allow for higher rents (or possibly allow for sources of ancillary income), then the value of the property will increase proportionally. The neat part is that the value of the property will increase AND the cash flow will increase at the same time. That said, this works both ways. If you take over a multifamily property and somehow lower the Net Operating Income then you will destroy value and cash flow. 

As you begin digging into the commercial side of real asset investing, you will find that this method of valuation allows for more flexibility on the business strategy. I personally think it is pretty cool. Happy to help with any questions you may have. 

- JA

Thank for you indulging me. Your answer was exactly what I was looking for. I guess the only think left to answer is: How does one calculate the appraised value of a multifamily property? For example , if I found a duplex that has tenants that both pay $850 per month, what how much will I be able to pull out equity-wise? It sounds like you're saying it's based off my rental income as opposed to my equity and neighboring comps.

Thanks for the quick response. I understand the restrictions between commercial lenders, and conventional lenders. But what I really want to know is if a conventional lender has the same cap number for businesses as well.

I think I've only seen the BRRRR method explain in conjunction with SFHs. Does that mean multifamily homes don't increase in value after rehab, in comparison to SFHs? Does that mean the only way to do it is to find multifamily properties undervalued that does need any work?

I understand that as an individual, to some banks I am restricted to have either 4 or 10 conventional mortgages under my name. But what about a business? If I have an LLC, do those numbers still apply to my real estate business?

@Frank Wolter My wife and I have been in real estate investing for the last three years. We have two duplexes and our own single-family home. I haven't been in the industry very long, but one thing I do know is cash flow is King. Because you have those units you most likely do not need to work, that piece of mind is much better than a big chunk of change that you have to worry about. Month after month those checks are coming, and it's a feeling you'll never get tired of. I say keep them. If you're tired of managing the properties yourself, get more properties, and then hire a property manager. Good luck!

Okay I understand. A broker facilitates the buying and selling of real estate through it's agents. For a second I though they were different. So based on these responses it's a good idea to get in with as many brokers as possible to have access to deals as soon as possible. The only thing I'm still uneasy about is the relationship between an agent and a wholesaler. Don't RE agents hate wholesalers?

Hi guys,

Quick question. Is a RE broker a realtor company/real estate company or something else?

Two quick answer is to search google/youtube to get answers to all your questions and talk with someone who is using the same strategy. I also recommend house hacking if possible. Live for free while you learn the ropes of multifamily properties. Do not get a property that needs repairs unless it's way undervalue and in a great neighborhood. It really could put you in a hole.