All Forum Posts by: Shalom Benton

Everyone says to buy multi families but are they worth it....

In my area a retail priced multi family is expensive, and often you only profit the value of 1 unit after the mortgage. And Often low income rent prices!

So how much are you all renting these places out for? And how much are your mortgages?

I’m wondering because it seems like I could just do section 8 on a single family home (3-4 bedroom) or duplex and it would be an easier entrance to passive income, with less tenants.

It seems like multi families are suggested as the way to go for passive wealth building....And it also seems like most multi families (4 units or less) are geared towards lower income.

So what are you guys renting these places for? And what is your mortgage cost?

In my area, I see the retail cost of a multi family is still high. It’s a sellers market. And it’s not worth what I’d get in rent, since most are lower income.

So what’s the secret that I’m missing?

@Don Konipol In this situation I don’t think it is a poor financial situation. It could be. But the owner moved to a different state and bought a mansion... it’s interesting to speculate what could have happened. I think you’re on to something when you say a loan might have been taken out against the first property, but why wouldn’t it be repaid if you have the funds?

@Kenneth Garrett

Your conclusion is the one I came to as well. There is definitely something missing in this story. I’m thinking a loan was taking out against the foreclosed property, but still... if you have funds to pay the loan, why would you let it foreclose?

@Seth Borman

Florida. Near students or low income housing.

Third home was purchased in a different state.

Riddle me this:

I recently saw this happen but I can’t figure out what the loophole is....

A trust fund baby purchases home #1 in cash for 50k. Lives in it for a few years. Buys home #2 in cash. Moves into it. A year later, Buys home number #3 (a mansion), and then the bank forecloses on home #1 and lists it for sale.

What is the loophole? Why would a wealthy person, who paid cash for a home, foreclose...? instead of just selling it?

I’m interested to know your wild ideas on what the loophole could be. Personally, I don’t know the answer. But I have my own guesses haha

@Salvatore Lentini I think this answers my question. You’re much more large scale than I am right now. And at your level, I think that’s when the lender will only require your personal credit score.

@Ujwal Velagapudi were all of your free and clear assets in the LLC?

@David M. yes, that does answer my question. Basically, bring in enough income in various ways including your schedule e. I'm trying to "retire" as a lifestyle, in my 30's. I hope to continue buying and flipping and renting. In general, I have only purchased off market owner finance deals. Now I'm moving towards refinancing, and eventually I was going to do a LLC business deal. But it sounds like there isn't much more lending advantage to an LLC (besides reducing liability).