Posted by DJ-nyc on May 07, 2011 at 18:02:13:
into a 4 unit. This was very time-consuming but it was vacant and I was able to do it to move away from “commercial” laws here in nyc. The six family buildings are cheaper to buy but the problem is “rent stabilization and rent control” (dated but notorious laws which is a problem for Landlords here).
I have seen four separate houses sold as a package on loopnet.com as well. I like the idea that you want to live in one unit and start that way. You will definitely get the “feel” of being a Landlord/Small buisness owner this way. Once you get your unavoidable experiences; You can refinance (if you buy it low enough, b/c you make your money on the ‘buy’) and buy another house for you to live in without tenants. I’m glad you are taking your first steps. Continue to seek wise counsel. All the best!
DJ-nyc
Four plex as first investment property - Posted by Danica
Posted by Danica on May 05, 2011 at 23:25:06:
I’ve been reading (procrastinating) for 5 years and finally have the courage and can put down 3.5% under FHA guidelines to get into my first property. Single, so I can live in one unit (and learn to manage by being on-site)and rent the rest.
Unfortunately I can’t find anything current on investing in them. Does anyone know of courses, books or anything that may be available since 2004? The only one I’ve found is “Investing in Duplexes, Triplexes and Quads” by Larry Loftis.
Thank you for any help given.
I LIKE FOURS TOO - Posted by DJ-NYC
Posted by DJ-NYC on May 07, 2011 at 06:28:00:
I always look for four units. They are “residential” and gives you more income than a 1-3 unit property. They are definitely not easy to find. I am looking as well. There are alot in my town though. (expensive) Find an motivated 4 unit Seller. I like what Camgere told you; and I agree to get involved with the REIA. But most of all “buy it right”.
DJ-nyc
Re: Four plex as first investment property: Update - Posted by Danica
Posted by Danica on May 06, 2011 at 12:32:39:
I have not gone as far as looking into an equity trust as yet and will bring it up with my attorney.
Camgere, thank you. I’m in WA, so finding them here has been my primary problem.
First, contact the local REI club makes sense.
Re: Four plex as first investment property - Posted by camgere
Posted by camgere on May 06, 2011 at 09:47:13:
Real estate is local and current. Books tend to be general and have year or decade long perspectives. Local REI clubs, apartment associations and message boards (ta da) can meet the local and current requirements.
Experience is the best teacher, so you are about to get a lesson. Learning from other people’s experience is all well and good. First of all you have to buy an investment property. If price is based (all or partly) on CAP rate, you want the highest CAP rate and honest repair, rent, vacancy and ongoing expenses. You still want a bargain based on comparables. Since you are doing FHA 3.5% down you will have a leverage of 28 and certainly need a CAP rate above your cost of borrowing. You need to know the general condition of four-plexes in your area. You don’t want to over fix or under fix the units. You’ll do them to your own taste, to some extent. You need to know realistic rents and vacancy rates.
You will certainly learn property management. While you want to be friendly with your tenants, they are not your friends. Be careful about gossip and chit chat. They are your customers. It is a business.
Have an exit plan in mind. Sooner or later, you will want to sell the place.
Good Luck!