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re: Information for my fellow Real Estate Investors
Posted on 5/14/16 at 10:57 am to buschlitepapi
Posted on 5/14/16 at 10:57 am to buschlitepapi
I'd be very weary investing in multi-family right now. Cap rates are about as low as they can possibly get and most in the know don't expect it to last very long.
Also $30k a unit or under? Seriously? If you want a bunch of tenants that are going to kill each other or don't speak English fine. You're slumlording it at this point. You can do this fine in SFR because you only need to find one tenant and you can be very selective. If you're trying to fill a 10-15 unit apartment complex you're not gonna be able to be as selective.
I think a much better price point to get into is the $50-75k a unit. The tenant base on this would be people who live nice normal lives, can afford rent, but don't necessarily want to live in ridiculously priced Class A apartments.
My plan would be to get in with somebody who has experience buying MFH and try to invest with them. You're better off owning 10-15% of a $1,000,000 property than you are owning 100% of a 8 unit $20k per unit complex.
Also $30k a unit or under? Seriously? If you want a bunch of tenants that are going to kill each other or don't speak English fine. You're slumlording it at this point. You can do this fine in SFR because you only need to find one tenant and you can be very selective. If you're trying to fill a 10-15 unit apartment complex you're not gonna be able to be as selective.
I think a much better price point to get into is the $50-75k a unit. The tenant base on this would be people who live nice normal lives, can afford rent, but don't necessarily want to live in ridiculously priced Class A apartments.
My plan would be to get in with somebody who has experience buying MFH and try to invest with them. You're better off owning 10-15% of a $1,000,000 property than you are owning 100% of a 8 unit $20k per unit complex.
1
Posted on 5/18/16 at 3:43 pm to yellowhammer2098
quote:
I think a much better price point to get into is the $50-75k a unit.
Even if he makes no money? lots of markets are over priced and don't cashflow at all. plenty markets do cashflow. markets are different price wise. Don't just issue a blanket statement for every market in the USA.
As a matter of fact the best times are over for SFH now in most markets that were hot(at least that i've seen and per many others at Think Realty). it was shooting fish in a barrel in 2013 and 2014. not so much now. now home prices in plenty previously hot markets have risen substantially and some markets have flat petered out now as far as cash flow. Wait til the next crash and scoop up a bunch at rock bottom prices. buy right or do not buy at all. That's how so many lost their arse in 07 and 08.
now there are still plenty cities with good cash flows but not like a couple years back. I wish i could have bought even more back then. I'm still looking but the cash on cash returns have dwindled in many markets. I cannot see spending 40k 0r 50k more than i ususally spend to make LESS cash flow than i get on cheaper properties.
This post was edited on 5/18/16 at 3:52 pm
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