Choosing Real Estate In Timaru With Your Family in Mind

January 11th, 2021 by admin No comments »

Before you and your family can pack your bags and make the move to Timaru, one of the South Island’s most character-filled cities, you will need to do some research in order to purchase a property that is handily located near good schools and community activities in the area. Being part of a solid, friendly community can make all the difference for your children to settle in comfortably to a new place. Even if you find a great property at a reasonable price, the location of the real estate can sometimes be more important in the long run than the cost!

Timaru is a relatively old city by New Zealand standards; with the first European settlement dating back to 1839. It used to be a highly volcanic area, and this is reflected in the hilly nature of the city which is built primarily on top of volcanic rock created from ancient lava flows. Today though, you don’t have to worry about volcanic activity as it is long extinct, and Timaru is a lovely, safe place to raise a family. Real estate in Timaru is very reasonably priced, and if you’re looking at relocating from overseas, then it would make a good place to base yourself in NZ.

Being close to a good school is something high on any parent’s priority list, so when you are choosing a new home in Timaru make sure you look into the different education options available. Timaru is not currently under any kind of school zoning system, which gives you the freedom to send your children to whichever educational institute you prefer. There are twelve primary schools in Timaru, and five high schools. If you want your children to just have a short walk in the mornings and not need to worry about the bus, then it is well worth investigating real estate options located close by the school they will attend.

Timaru is made up of seventeen suburbs, each of varying sizes and with their own personalities. Depending on what recreational activities your family enjoys, you should be able to find an area that would suit perfectly! If surfing in summer is something you love, then choosing a piece of real estate near Patiti Point would be ideal as it is known in NZ as a place to catch good waves. Or if you’re planning to work in town, then basing your family near the central Stafford Street area could cut down on your travel time.

Finding the right real estate in Timaru, NZ may seem like a challenge – but once you’ve moved in to the perfect house in the right area for your family, all your effort will be worth it!

Real Estate Investing to Generate Cash Flow

December 15th, 2020 by admin No comments »

Even in this day of plastic credit cards and electronic fund transfers, the old adage still rings true: cash is king. Without plenty of if it, you find yourself in financial distress, struggling to keep your head above water. But when you have plenty of it, life is good-the sun is brighter, the sky is bluer, the grass is greener, and you just breathe so much easier. With that in mind, the only logical question to ask is how can we make sure we always have enough cash? Well, different people answer this in different ways. Some of their answers work-some don’t. Here’s an answer we’ve found to be correct for us: generate a recurring cash flow through real estate investing.

Imagine this scenario. Each month, renters pay you thousands of dollars. What have you done? Well following your initial real estate investment, not much. You have a property management company you pay to run things for you and you just check up on things here and there to make sure all is running smoothly.

How the cash flow associated with real estate investing works

Obviously, the ideal situation would be to purchase a property for cash and then begin renting. At that point, all the cash you received, minus operating expenses, would be yours for the taking. Eventually this recurrent cash flow would exceed your initial investment and then you’ll really be a happy camper.

Of course, most of us are not in the right place to be able to pay cash for a real estate investment. So instead you might consider taking out a loan to aid in purchasing the property. At this point, a portion of your cash flow would go towards your mortgage, principle and interest. However, this shouldn’t be looked at as a loss, as essentially someone else is paying your mortgage for you. Another portion of your monthly cash flow would go towards property management.

The idea is to have money left over from your cash flow each month after paying all expenses. This is referred to as “cash on cash return.” In other words, it’s profit. How can you make sure this happens when real estate investing? Well, it’s all about identifying a bargain and pouncing on it when the time is right.

Single family or multi family? Which is better for cash flow?

You will certainly hear people make decent arguments for both sides. However, we believe multi family is the way to go. Let’s just look at the basic difference. When you rent out an apartment building, there are many different tenants paying you rent each month. If one moves out, it impacts your cash flow a bit, but you still have others paying you. And the odds are good that you’ll rent the apartment out again soon. But when you rent out a single family home, your cash flow is reliant on a single person. If they move out, the cash flow stops until you find someone to move in. Which sounds better?

Multi family real estate investing is the way to go for cash flow

Multi family real estate investing can help you generate a reliable source of CF. For more information on how to get started, find a real estate advisor online.

Professional Broker Versus Family Agent When Buying or Selling Temecula CA Real Estate

December 8th, 2020 by admin No comments »

As the Temecula real estate market continues to transform into a buyer’s market, one disturbing trend comes up time and time again – the family real estate agent. Why could using an out of area, or new family agent be a major problem and bad buyer decision? Simply put, they don’t know what they don’t know and due to this issue, often advise their clients poorly.

Now there are many families that have full time professional real estate brokers that work and live in the area they want to move to. That is a great situation in which you can help a family member and they can help you. Frankly, I do it all the time. However, the amount of mistakes being made by people who choose to use an inexperienced family member over a professional and local real estate broker is going to have a lasting impact.

For instance, some of the issues in the high growth areas of Temecula, Murrieta, Menifee, Wildomar and North San Diego real estate are tax rates, future area planning, opportunity costs, negotiation, and the overall smoothness of the transaction. Many people are paying today for their own poor choice in representation. How about trying to sell a home in a place that has now become a major traffic thoroughfare? Or is it harder to sell a home when your tax rate is so much more than surrounding communities or the builder you bought from is now selling the final phase homes at $30,000 less than you paid with another $25,000 in buyer incentives.

Is that a good deal? Not if the tax rate is obscene and certainly not if you are trying to sell your home and the builder is undercutting you now. A lot of new, related agents put their family members into new homes because of builder incentives while fantastic opportunities were available elsewhere. You may have helped that family agent but you really hurt your financial well being and with the real estate crunch now happening, your family agent is most likely out of the business unless the moved on to become a strong and viable professional in their market.

Right now, clients need agents that see, understand, and communicate the real estate landscape to their clients. Buying a home is a major decision and shouldn’t be treated as a routine transaction. Although buying a home through a real estate agent or broker is a free service to the client, the agent gets paid to protect and use their professional skills to represent you to the best of their ability. The recent market conditions over the last few years have seemed to make buying a home a more trivial transaction then it really is.

So how do you handle a situation where you have a family agent but would prefer to use a professional? Well, there is the straight communication that you want a full-time professional broker working for you. That is the best way but can lead to some potential hard feelings. Or there is another method that most agents will hate even being mentioned, a referral fee.

The practice of referrals is very common in our business and usually means the referring agent gets 15-25% of the gross commission from your transaction. In this situation you or they can pick out an agent based on their professional and local ability and still give a piece of your business to your family agent, thereby easing any tension. Almost every agent does referrals when we have a client moving to another state or city. The best part is the referring agent doesn’t have to know the details of the future transaction, they just get a paid a portion of the commission. Again, as a buyer you pay nothing and yet this way you get the best service available and keep things good on the family front.

This can be tough on an agent that works hard for you but if you are a good buyer, it is absolutely worth their time and now you also have a professional you can use in the future when you sell, or friends move to the same place. Life is often about making good connections with experts who help you maximize your investments. A home is one of the biggest investments you will make, so don’t make a poor decision that will impact your purchase decision, negotiating, financial wellbeing, and future long term investment value just to give a part-time or inexperienced family agent a deal.

Are you looking for “tomt stubljan”? Check out carlot The passionate experts in this field are ready to answer all of your requests.

Uncommon View – Commercial Real Estate Development

November 23rd, 2020 by admin No comments »

This is a story I heard growing up:
When my grandfather was 10 years old he found a penny. With that penny he bought a pencil. He sharpened that pencil then sold it for two cents. He took that two cents and bought two more pencils, sharpened them and sold them for four cents. He reinvested his four cents in four more pencils, sharpened them and sold them for eight cents. Then, again, he bought eight more pencils, sharpened them and sold them for sixteen cents. This went on until my grandfather had amassed $10.24. That’s when my great Aunt Sophie died and left us her portfolio of shopping centers, office buildings and rental homes. Our family has been in the real estate business ever since.

The story isn’t true, but it taught four valuable lessons:

1) Sweat equity is a powerful tool;

2) If you reinvest your earnings, wealth can grow geometrically;

3) The BIG money is in real estate; and

4) It would be nice to have a rich Aunt Sophie.

Like most families, we didn’t have a rich Aunt Sophie, so my parents focused on lessons 1, 2 and 3. I mention this story as a backdrop. My life growing up was always about real estate.

In my article “Keys to Closing Commercial Real Estate Transactions”, I mentioned my father because he was, and is, a wiz when it comes to commercial real estate. It was through him that I came to represent commercial real estate developers.

What I didn’t mention was that my mother was active in the family real estate business as well. While my father focused on commercial land development, my mother focused on residential real estate. I should have known better than to mention one but not the other. This article could be sub-titled “Keys To Maintaining Harmony”.

What does maintaining harmony have to do with commercial real estate development? Stick with me on this, then decide.

My mother cared about “quality of life” issues. Comfortable homes. Neighborhood parks. Safe streets. Good schools. Museums and other cultural enhancements.

I remember watching my mother lay out walking paths around detention ponds in residential developments and looking through catalogs evaluating park benches and playground equipment for neighborhood parks. As a residential real estate investor, developer and broker, my mother focused on “living environments”. If families were going to live in her neighborhoods then the neighborhoods had to be “family friendly”.

As you might imagine, with my father focused on commercial development and my mother focused on residential quality of life issues, conversations around the dinner table were always interesting, and sometimes dicey.

On one side of the table, my father envisioned expansive commercial development for retail shopping centers, office buildings, restaurants, hotels, theaters, warehouse superstores, entertainment centers, nightclubs and more.

On the other side was my mother insisting upon neighborhoods with comfortable homes, safe streets, parks and other open areas, dry basements, clean air, clean water, and minimal noise and light pollution.

According to conventional wisdom – derived from public zoning board and plan commission hearings and community planning group meetings when commercial development is proposed near existing homes and neighborhoods – one might expect a clash of ideas turning into heated challenges and demands to forego development. Fortunately, our dinner table was nothing like most public hearings.

My mother and father each respected the vision of the other and understood the natural symbiotic relationship between residential and commercial development. Instead of complaining that one was trying to destroy the vision of the other, they anticipated each other’s legitimate development and environmental needs and sought reasonable accommodation when possible. Sometimes they couldn’t agree, but there was always a meaningful attempt to understand the viewpoint of the other, exchange ideas and come to a mutually respectful and workable plan.

My mother was a resourceful advocate. She made my father think about how commercial development would impact residential neighbors and plan ways to mitigate adverse consequences on families. Long before coming into their current vogue, I learned at our family dinner table the concept of “lifestyle commercial centers” and complementary residential/commercial mixed use developments.

The point for commercial developers and residential advocates is that they should each turn down the volume of their development debate and respectfully listen to what the other is saying. When the other has presented legitimate concerns or needs, those concerns and needs should be reasonably accommodated where possible. An idealistic dream? Perhaps. But I grew up watching it work.

To be sure, not all expressed concerns are legitimate and not all proposed accommodations are possible. In those cases, resolution must necessarily be left up to public plan commissions, zoning boards, and municipal trustees or aldermen to arbitrate and decide the debate. As guardians of the public welfare entrusted with promoting the best interests of the community at large, they must decide. In a fair and evenhanded political environment, your best bet for prevailing is to demonstrate that you have listened with respect and have made reasonable and conscientious efforts to promote public harmony rather than discord.

POINT: If you are a commercial real estate developer proposing a commercial development near existing residential neighborhoods, don’t pretend they don’t exist. Think about how they will be impacted and include in your development plan ways to mitigate any adverse consequences created by your development. Talk to your residential neighbors. Listen to what they have to say. They are not ALL crazy. Sometimes (often, actually) they have legitimate concerns about real problems. If you can include in your development plan a way to economically fix a problem they already have (such as flooding, blight, inadequate parking, lack of sufficient parks or playgrounds, poor traffic circulation, etc.), your chances of favorable governmental action to approve your development plan goes up.

Whether you are a commercial real estate developer or a neighborhood advocate, understand that, whether you like it or not, conditions change. Nothing stays the same. Obsolescence and blight are natural products of time. Redevelopment is coming. If not today, then someday.

Which brings me back to my point of promoting family harmony by making amends to my mother. You don’t necessarily have to read what follows. This is primarily for her.

My mother retired last year but says she still enjoys reading my newsletters and articles. Perhaps a mother’s love, but she always likes to read what I write about real estate and real estate development. She says her favorite is a poem I wrote about “real estate development” called The Great Pyramids Of Egypt Are In Disrepair. She thinks I should share it.

The poem was written in 1992. I have to admit, it never occurred to me that the poem was about “real estate development”. I can assure you, I was not consciously thinking about real estate development at the time I wrote it.

But my mother is a smart woman and I have learned my lesson. I am not going to lightly cross her again. So, in the interest of family harmony, here it is. I leave it to you to decide if it is about real estate development. If you don’t think so, please don’t tell my mother.

บาคาร่า foxz24

Commercial and Multi-Family Real Estate Inspections

November 5th, 2020 by admin No comments »

How many times have you looked at a Multi-Family or Commercial property and wondered; “Hey, this building looks like it’s in good shape but is it really?” or “This place looks really run down, what other problems are there that I don’t know about that could come back to bite me later?” There very well may be things that you don’t know that could be a problem later or there might not be, but the not knowing is what really makes people nervous.

There is a way to know what those things are. That is to have a good, thorough general visual inspection done that lists out the true condition of the site along with solutions to those problems. Then you will know what the hidden problems are and what can or should be done about them.

The yardstick in the industry for commercial and industrial real estate inspections is the ASTM – The American Society of Testing and Materials. This is the standard used by most professional commercial real estate inspectors.

A trained professional inspector looks at the entire site while paying particular attention to the Plumbing, Electrical, Heating and AC, the Structure and Roofing. The inspection should also cover immediate drainage issues. The inspector should also look for material (meaning of significant importance or great consequence to the property) defects and safety issues. It’s also a good idea from a buyer’s perspective to ask the inspector to estimate the remaining expected useful life of the systems per industry standards. Most professional inspectors provide a written report of their findings and the best inspection reports also contain pictures that show what was found.

Most inspections are purchased by the buyer at the point the building is being sold. But what about the owner/seller of the property?

Peace of mind is hard to put a value on. If the seller has an inspection done he then knows what is going on with his property without any sugar-coating or biased views. More importantly, he/she now knows what a buyer is going to find out about the building. This gives the seller time to go over the options with his agent and find out what solutions there are or the best way to proceed: give a credit toward the repair or get the work done now.

For example, if the roof is bad and the seller knows what cost parameters exist then he/she is not left with a big unknown. If the seller knows ahead of time and discloses it to the buyer then the buyer feels more comfortable dealing with the seller. This may be the difference between a deal that goes through and one that falls apart.

During this challenging economic time I am finding that the deals that fall apart do so because of the unknowns. Anything from the bank changing its policy at the last minute to underground problems with the sewer lines or old HVAC equipment, etc. The purpose of a real estate inspection is to eliminate some of those unknowns. It’s cheap insurance for both the buyer and the seller.

The point here being that if you have the information you need, you can make informed decisions that can save a lot of money. By doing a good, thorough general visual inspection, the seller can increase the value of the site by taking care of problems as well as having the peace of mind of knowing the true condition of the building. In addition, both you and the buyer will know what costs you can expect over the next five years, other than routine maintenance. For the cost of an inspection you can acquire all of this information.

Giving Due Diligence

October 22nd, 2020 by admin No comments »

Multi-family investments are currently dominating market activity. Young people are preferring to rent while families losing their homes to foreclosure have no option but to rent. Already there has been a sharp decline in the rental vacancy rate to 6.2% in first quarter of 2011 and a double-digit rent hike is being anticipated by economists over the next two years in the hottest markets. This has investors flocking to buy rental apartment buildings.

Buying commercial real estate may be glamorous, but the financial due diligence needed to do it wisely is not. Still, financial due diligence is essential for basically any commercial real estate acquisition today. There is no such thing as a “small” acquisition that can afford to forgo a rigorous financial due diligence review, and there is no commercial distressed asset acquisition that is “simple” or risk-free. The current commercial real estate market involves assets typically ranging from $10 to $50 million, but can fluctuate from $5 million to $500 million. This is especially true of the multi-family investments. Analyzing past operations in order to project future property performance is never a black or white endeavor – it’s very grey. Evaluating the true value of a garden apartment building or multi-family midrise is a complex, multi-phase undertaking that often eludes complete clarity. A wide array of variables conceal the true value of a property.

How can a buyer be sure that they are getting the benefit of their bargain and avoid the financial and legal pitfalls that lie at every stage of the process? Although risk is an unavoidable element in any commercial real estate purchase, the stakes are even higher when buying distressed assets in today’s erratic market. The only way to limit risk is by conducting adequate financial due diligence on the asset.

Whether purchased through short sale or by buying notes or bank-owned (REO) properties, every distressed asset is unique and requires a multi-step process of examination, including valuing the note, valuing the real estate and conducting due diligence on the loan, property and seller. Rushing to purchase troubled assets before conducting thorough and comprehensive due diligence can all too often lead investors to pay inflated prices and eventually lose money. Cash-rich funds have been especially susceptible to this mistake.

The market has changed drastically. Assumptions utilized in the past are no longer accurate (and possibly never were.) Instead of accepting underwriting based on past expectations, it is important to find the “true value” of the asset. The primary task, then, is to gain a clear financial picture of the asset today and uncover any current or potential trouble spots. This is accomplished through a comprehensive financial due diligence review and an honest and conservative market analysis. It is a process that few companies are qualified and staffed to conduct in-house.

Many investors are turning to financial due diligence specialists for help. In addition to a market analysis, financial due diligence specialists conduct comprehensive financial audits, compiling and interpreting many layers of documentation within sharply restricted time frames. This process includes:

validating and verifying all rents, as well as any income from additional sources, such as parking, vending machines and the like;

validating and verifying all expenses; these are generally more numerous and variable than income items and can include outlays for anything from snow removal to elevator replacement;

establishing the historical record of income and expenses in order to verify the accuracy of the sellers’ projections for future budget and cash flow; and

reviewing bank statements to confirm that income is reflected in statements.

The data is then compiled and presented in a comprehensive report with a clear and concise executive summary.

When specifically conducting due diligence on a distressed note, it becomes necessary to conduct multi-layered due diligence. The first step is to organize and abstract the loan documents to ensure a clear understanding of the rights, obligations and responsibilities of all parties. Next, a financial review of the underlying property is needed, to the extent that access to available documentation allows. There is simply no other way to properly evaluate the value of what is being acquired.

Proper and accurate due diligence can also be helpful post acquisition with the complex organizational and logistical issues that arise should the investor need to take ownership of a foreclosed property. The purchase of notes on distressed properties also has many legal pitfalls to avoid. Investors need to hire qualified counsel to ensure the enforceability of the loan documents and protect against any potential lender liability claims brought by a borrower in connection with an acquisition.

Family Real Estate Business

October 15th, 2020 by admin No comments »

We all have families, but not all of us work with them. If your real estate business includes a family member or two, you already know what the good and the bad of it is. Learning how to increase the positives will help in creating not only a stronger platform for your business, but also in stronger ties with your family. This particular balance can be a tough one to manage; however, it is very possible.

As a real estate mom, no one has to tell you how difficult it is to combine your career with your family life. When part of that family life is also an integral key to the success of your business, complications can arise. Issues such as fair compensation, flex-time, favoritism, and familial boundaries can each lend a hand in specific problems you likely won’t face with non-family employees. The goal is to achieve a harmonious working relationship without jeopardizing those all important family ties. To do this, you need to plan ahead and take into consideration any and all possible issues.

Making it Work

Whether you’re worried about being taken advantage of or taking advantage of, some simple tips will have you headed down a much smoother path to the work environment you’re seeking. These 5 tips should get you started:

o Form Definite Boundaries. While this rule sounds simple, it can be difficult to achieve. The best way to handle it is open communication from the very beginning. Explain clearly that while on the job, it is best to keep family chit-chat to an absolute minimum, if at all. Let them know this goes both ways – that you won’t be calling them at home on the weekend to discuss work. Keep the two entities as divided as possible!

o Keep the Clients Separate. Sticky situations can sometimes arise when a family member is a social friend of a client. Business is business, and any possible work issues need to be kept confidential and not turned into fodder for gossip.

o No Hard Feelings. Real estate is a competitive environment. Realize that the monthly sales figures could cause negative emotions in whoever is on the lower end. Be supportive to each other to get through these moments of crises – and be prepared to deal with them when they occur.

o All Employees are Treated Equal. From day one. If your normal course of action is to put a job offer in writing, including compensation and benefits, don’t deviate from this with family. While the process may seem more casual, it isn’t. You need to be as effective and vigilant with family employees as you are with non-related ones.

o Communication is Vital. You already know this, but don’t forget it’s just as important when dealing with your family in your workplace as it is in other areas of your business. They deserve the respect of one-on-one business meetings to voice their concerns and to discuss their job, and your business, in general. Miscommunication is the biggest cause, by far, of poor job relations. Keep this in mind, and you’ll go a long way in keeping everyone happy. Including yourself!

All in all, the way you treat an employee should be consistent. Whether a part of your family or not, creating the correct boundaries from the beginning is imperative. However, that being said, a non-related employee probably hasn’t seen you in your PJ’s, or at family gatherings, or visited you when you had your first baby. Therefore, normal innate boundaries aren’t going to be in place with family unless you strive to put them there.

Once you do, however, you will begin to see the positives when working with a family member far more often than you will see the negatives. It is possible to combine family and career – as long as you know what you want, how you want it, and take the proper steps to communicate those wants effectively.

How to Make a Fortune Investing in Multi-Family Real Estate

September 25th, 2020 by admin No comments »

We’ve all heard the dictum about the dangers and risks associated with putting all our eggs in one basket so many times that you would think when it came to real estate investment few sane people would want to place all their investment in a single-Family property.

Yet many of the people I meet in the courses I run have exactly this kind of approach which shows, perhaps, just how powerful market conditioning can be.

Most of the real estate moguls we get to hear about tend to be single-Family property types (with the exception perhaps of Donald Trump who has taken the eggs in the basket dictum very much into account in everything he has done) and this tends to brainwash us into thinking that either this is the only type of real estate investment available to us or that this is the only type of real estate investment there is.

The truth is that investing in multi-family properties spreads the risk of your investment without drastically increasing the costs and, in addition, allows you to create a built-in buffer against an apartment or two going vacant at some point (which is always a risk you need to be prepared for).

With a single-family property should the tenant’s personal circumstances change you may well find yourself missing out on a couple of months of income which is enough to wipe out your profit from that property for the year.

The risk of this is spread thin with a multi-family property however where a tenant or two moving out does not affect your monthly income from the building enough to seriously jeopardise your annual profit and that is one of the beauties of investing in multi-family properties.

Couple it to the fact that thanks to popular misconception you are competing with fewer other real estate investors for the choicest properties than if you were active in the single-family home market. This is not to say that you should develop a mindset which specifically looks at multi-family properties to the exclusion of everything else.

Far from it. Good business is where you find it and as a real estate investor who has bought single-family homes to flip (indeed I started out my career in real estate investing with a single-family home) I can tell you that if you come across a good deal or need to buy a property to flip quickly so you can invest in an apartment block you should never overlook the possibilities offered by the single-family property, much as you leverage multi-family ones in order to build up a portfolio that will guarantee you never have to work to someone else’s schedule ever again.

Multi-Family Real Estates Are the Way of the Future For Real Estate Investors

September 6th, 2020 by admin No comments »

Old adages are always true because they have come about as the result of direct experience and of them all perhaps none is truer than “you can’t put all your eggs in one basket”.

Take real estate for instance. This is an area where you can make a fortune or lose your shirt. It depends how lucky you get, how you handle it and whether the market is running with you or against you. All of these factors spell ‘RISK’ with capital letters and risk is just the kind of four letter word real estate investors really hate to hear.

So what do you do? Well, if you are in the single-family property you do everything you can to make sure you control the things you can control and hope you made the right decision in the things you cannot control. If, however, you are still thinking of getting into real estate and are right now weighing up whether you should go for a single-family property or a multi-family set up I can give you the direction you should be thinking towards in just three words: “risk aversion strategy”.

In the risky world of real estate a single-family property is just too exposed in terms of how it operates and how vulnerable it is to the vagaries of the market. A multi-family dwelling, on the other hand simply spreads the risk in a way that makes the entire venture a lot more acceptable.

It is this, more than anything else, that makes multi-family dwellings seem so attractive that I am convinced they are the way of investing for real estate investors of the future. Whenever I come out with something like this I have to also list all the obstacles that prevent other people from thinking the same.

The list is not long but it looks, at first sight, formidable. For instance, investors worry about having to deal with a dozen irate tenants at once, all ringing up late on a Friday night to complain about the plumbing backing up or the heating having broken down. In fact, the main objections, seem to be that most people think of a multi-family dwelling scenario as all the problems of a single-family one multiplied by the number of residents.

Switch mode of thinking however, think about spreading the risk and you realise that what you are actually get are approximately all the problems of a single-family dwelling spread over the number of residents with the added attraction that you do not ever have to be the one dealing directly with them.

Now, that is beginning to make a lot more sense and it is just the kind of thing I talk about when I say that multi-family dwellings are the way of the future for real estate investors.

David Lindahl, also known as the “Apartment King” has been successfully investing in single-family homes and apartments for the last 14 years and currently owns over 7,000 units around the US. David regularly shares his secrets and experience on the same stage as Tony Robbins, Robert Kiyosaki, and Donald Trump! For two FREE copies of his highly recognized newsletter Real Estate Insights.

What Is Multi-Family Real Estate Investing

March 13th, 2020 by admin No comments »

Multi-family real estate investing is the process of buying units that provide housing for multiple different families. Unlike owning a single family home that you rent out to only one person or family, multi-family buildings have two or more separate dwellings. Multi-family buildings can range from a duplex to a huge apartment complex, but no matter the size, can be a great investment as long as you understand what is involved in finding a property and being a good landlord.

Considerations in Multi-Family Real Estate Investing

When you are considering multi-family real estate investing, you are usually going to need to make a larger investment than you would for a single-family home. You will also need to qualify for a mortgage for a rental property, which may involve a different approval process than qualifying to buy your own house. For instance, applying for a mortgage for an investment property that is a multi-family unit may involve showing how the property itself will generate income by doing projections of your expected expenses and cash flow.

Once you have obtained financing and purchased the property, you will need to deal with both the advantages and disadvantages of multi-family real estate investing. One of the most obvious advantages is that you have the potential to earn more rental income than you would if you had only a single unit and a single tenant. Your income streams are also diversified because you have several different renters. This can be safer than having just a single unit home, since when your tenant moves out of the single unit rental you are left with no rent at all.

Of course, the downside to this is that you or your property management company will need to make sure all of the units are rented instead of just worrying about finding a single tenant. If two tenants move out at the same time, for example, you’ll need to work to find two new qualified tenants.

With multiple tenants, you also have the potential for problems among the tenants, such as noise complaints or other related issues. While these problems can exist to some extent from neighbors in a single-family home, the issues tend to arise more when many different families are sharing space. Having clear rules in the lease about noise and tenant obligations can assist you in stopping problems like this before they start, and hiring a property management company can allow you to avoid having to deal with issues of this nature at all as the manager will take care of them for you.

Other possible advantages of including a multi-family property in your real estate investing will vary depending on the type of property and your situation. For instance, you might be able to live in the property yourself and make enough in rent for the tenant to pay off the mortgage, essentially allowing you to live for free in your own home while gaining equity. You also have the opportunity to allow an on-site manager to live in one of the rental units in exchange for providing building maintenance. This can save you money as your management fee will likely be reduced, and can help to ensure that your tenants are happy in the building and that issues are promptly resolved.