Posted by Jim Beavens on March 19, 1999 at 13:27:22:
I don’t know about the rates and terms, but in terms of the lending criteria and the down payment required, 4 units is traditionally the cutoff point between a residential and commercial property in the eyes of the bank. Many non-owner occupied residential loan programs are valid for up to 4 units.
4-plex purchase - Posted by Mike8675
Posted by Mike8675 on March 18, 1999 at 09:15:58:
I’m looking at buying a 4-plex and was wondering if there’s any way to find out if the current tenants are paying their rent every month or if the owner may be getting stiffed and trying to kick one or more out. I know better than to ever take an owners word for truth! Is there a way to find this out? Anyone also have words of caution in buying multi-family properties?
Thanks,
Mike8675
Re: 4-plex purchase - Posted by Laure
Posted by Laure on March 19, 1999 at 09:22:13:
My experience with purchasing small multi-family is that the Landlords usually don’t have current leases, and the Tenants all leave as soon as I buy. I guess I’m a Grinch ! hehehe But I run a tight ship, and I let them know that the day it’s mine. I go around and introduce myself, present new leases, notify them that I don’t tolerate late rent, and about half turn in their notices. Out with the old, and in with the new ! And a great chance to raise the rents too !
One 4plex I picked up was only renting for 150, and 175 per month, and the other two units were empty. Within a week, I had the empty units rented for 450/ month. One of the present Tenants left two weeks later (rented it for 500) and one Tenant stayed. I let her stay for 350/ month and she watched over the place.
Good luck with your deal ! I wouldn’t be too concerned with what the present Landlord gets for rent if you know what your market will bear.
Laure 
Re: 4-plex purchase - Posted by Steve
Posted by Steve on March 18, 1999 at 18:11:42:
Ask to see the seller’s federal tax data about income and expenses pertaining to the property in question after he has stated that same information to you. The TRUTH will be somewhere between what he tells you and what he tells the IRS.
Re: 4-plex purchase - Posted by Mark (SDCA)
Posted by Mark (SDCA) on March 18, 1999 at 15:30:35:
Ask to see the owner’s records. He should have Schedule E’s. And for more recent records, you can ask to see bank deposits or tenant receipts.
As for multi-families, I love 4 plexes. They have good cash flow, are fairly saleable (even to an owner occupant- advertise as live in 1, rent the other 3. Rentals pay the mortgage). Also, they qualify for residential rather than commercial rates and terms.
Cheers,
Mark
Re: 4-plex purchase - Posted by Mike8675
Posted by Mike8675 on March 19, 1999 at 11:39:05:
The reason I asked is because this seems like a great deal and I can even get conventional financing on it! They’re asking $102,000 and two units rent for $425 and the other two rent for $365…all are 2 bed/1 bath with basement storage for each unit…sounds like a good deal, but there’s always a reason why they’re selling! I just need to find out why. The ones that rent for $365 could be bumped up to $400 (upstairs units).
Thanks to all that answered.
Mike8675
Re: 4-plex purchase - Posted by Redline
Posted by Redline on March 19, 1999 at 09:54:31:
“Also, they qualify for residential rather than commercial rates and terms” … uhh, are you SURE about this one? I’ve been led to believe differently.
RL