Hi everyone,
I've been following this site for some time now, and I'm excited to get started with REI.
I'm in contract on a 6-unit multifamily property in Massachusetts, where I spend a good deal of time, that should generate about $180/door/month before maintenance and capex. Since I work a fulltime job and don't need the income for now, my plan is to devote the first few years of income to improving the property and increasing performance through forced appreciation. Also I think there's opportunity to improve cash flow by converting from central oil to submetered gas (the electric is already submetered). My long term plan for the property is to use one of the units as a retirement home base.
My lender is a local bank that is doing a commercial loan based on the P&L of the property. I also have my eye on some other properties, but I want to leave myself with reserves, since this is a 100+ year-old property. My question is, what kind of reserves will a commercial lender be looking for? Do they have to be liquid or can I use my 401k as reserves? I'm considering another deal that would put me on the edge of depleting my capital. I'm also wondering if I should get some more landlording experience before acquiring a second property.
Any and all feedback is appreciated.
M
