RE Beginner - Are Multi-units The Way To Go?
I want to generate cash flow with the possiblity of appreciation. I don't have any trouble doing slight rehab work or simple repairs.
I've purchased a SFH (bank owned forclosure) with an uncle of mine 2 years ago for 60K +10K repairs and sold it for 120K 8 months later. My uncle wanted to hold onto it a little longer but since it was my first investment property i wanted to get out as fast as possible. I now realize that i should have held it for at least a year. i plan to do that in the furure. I could probably invest more with my uncle but the properties are about 1.5 hours away and I would like to do something closer to home.
Currently i have a 130k HELOC on my primary residence and am looking to invest it in RE. I have been looking for multi-unit homes, duplexes, small aptartments. I also have a friend that is looking to invest in real estate as well that could probably come up with the same amount of money. Any suggestions? I am about 1 hour north of Philly.
I would like to use the heloc to purchase (like cash). But to buy multi units i think i will need about 300K. So financing or a partner woulf be neccesary. Or maybe i just look in the below 100 price range like the last one.
I am just not sure if its worth trying to get financing/mortgage/partner just to get into MU RE.
Thanks in advance
Hello
I invest in the Philly area. Just use the Heloc like cash and buy cash and then refinance the property to cash out and do the same thing again.
When figuring out if i can afford the loan, won't the bank take into account that i have a heloc open? this may not be a problem right away but after a few houses, it may be a problem. what do you think? debt to income ratio would change very quickly.
are there any re investor clubs in the philly area that you would recommend?
check the laws in philly but if you have a friend that can split things 50/50 with...and you see eye to eye...start a limited partnership...
your goals should be the same and you should have the same outlook on things or it wouldnt be a good idea to have an equal say in investment properties
LLC's can be great tax shelters too so do a little research on it and see what you come up with
i cant stress enough, just make sure the two of you see EYE TO EYE...
good luck
~Andrew
As far as multi goes, I'm going to treat the SFR's I buy next year as multi. They'll all be similar in price, cash flow, etc. And contrary to a true multi I'll be able to offer the same product in a variety of locations.