Income/investment property listings

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momopi_IHB

momopi_IHB

New member
Where is a good place to find multi-unit rental/income property listings, and commercial RE listings other than local papers and... home seekers.com?
 
<p>while this sounds like a GREAT idea, its kinda difficult because Commercial stuff isn't cheap. Believe me, I've had to walk into 30%-40% down situtations pretty regularly. What are you looking for specifically?</p>

<p>-bix</p>
 
<p>I am not sure what momopi was looking for but I would like to know where to find small apt. buildings for sale. </p>

<p>I grew up near Santa Monica in West LA and there were a lot of small 10 unit apartment buildings. I remember my father was very close to buying one near Sepelveda and Venice for $950,000 back in 1995. I remember it having 6 1b and 4 2b with a cap rate of 6% at that time.</p>

<p>I know OC really doesn't h ave much like this outside of the older communities like Santa Ana and Costa Mesa but I would like to find these if they exist. </p>
 
<p>momopi</p>

<p>You will find that 1 to 4 units are under the same general rules of lending and oversight by the DRE. Once you go above 5 you really need to be well informed as it is an entirely different ball game. I believe that at 14 or more units an onsite manager is required.</p>

<p>Biscuitninja seems to have lots of experience and be well informed on multi units. </p>

<p>If you think people got taken advantage of in the "bubble" you really need to have a dose of "buyer beware" in the commercial venue.</p>

<p>Kind of like the story about the investor and the banker who became partners. At first the investor had the experience and the lender had the money. After the transaction, the investor had the money and the lender had the experience. LOL</p>

<p>Good luck!</p>

<p> </p>

<p> </p>
 
<p>1. Buy 1 to 4 units.... After that it gets expensive... REAL expensive and you need lots of lawyers.</p>

<p>2. Do you have enough money to bring the mortgage down to 80-85% of intial of running the apartments? (You should really shoot for 75% to take care of everything as well as take care of any issues you might have with renters (cash resivoir, extra insurance, payoff's...)). This is usually 25-40% (closer to 40% of the cost of the units).</p>

<p>3. Hire a company and make sure they are good, doing it yourself costs ALOT of time and effort. Unless you are retired or have a flexible schedule don't do it. As far as cost, please refer to #1 and #2. </p>

<p>good luck</p>

<p>-bix</p>
 
I can probably do 25% down payment on a 4-plex, and will hire a property manager to take care of the rental.





Basically I'm looking to "move up" from single unit condo rentals to multi-unit in 2009-2012 time frame. Any suggestions would be helpful!
 
<p>Mo, </p>

<p> You want to buy a little ealier, or buy a little cheaper. 25% is pretty much a step in cost and I don't know if the banks will want to fund you (toss up on if they will....). Again, do your homework and make a good business plan as to how much you'll make (CAP RATE). Take it easy </p>

<p>-bix</p>
 
<p>Bix - I see a lot of apt buildings with cap rates of 5%. If I can make 5% already in the bank with risk free CDs, why jump into an apt. complex?</p>

<p>The ones I am looking at are old and though rent might go up in the long term, I imagine the building will incur more and more expenses due to its age. </p>

<p>Is the end game to sell the property for more than you bought? </p>
 
<p>rpk, </p>

<p> Yes, the idea is to get the place for less than the market price, put in a few repairs to add value and then keep it for a while. After a few years of steady cashflow you turn the place. </p>

<p>Its just like flipping a property, but the dollar amounts are FAR more than most houses. When I started my CAP rate was about 3.8%, after 10 months its verging on 5.2% But the end of the 2008, i'm projecting 7-8%. So its all about cashflow right now. Unfortunately alot of CD's don't pay out on a monthly basis unless you get into them for the LONG haul. </p>

<p>Anyways just my two cents, people do it alot differently, so to each their own.</p>

<p>-bix</p>
 
<p class="MsoNormal">Bix,</p>

<p class="MsoNormal"> </p>

<p class="MsoNormal">First off, thanks for sharing your experience. I’ve learned a lot from this community.</p>

<p class="MsoNormal">My question is regarding your entry cap of 3.8%, how did you get the property to cashflow at such a low cap? Did you put a lot down?</p>

A majority of the properties I look at that are in the 5.5-6 cap range, require at least 50% down just to break-even.
 
<p>Tenmagnet, </p>

<p> Shop around and look for deals, just like buying a house. I also set the cap rate artifically low. I just keep the money in reserve in case anything happens. That's why i put 38% down, the banks wanted me to put more down, but I negotiated the loan by "securing" the debt. That excess money just sits in a high yeild account as backup in case I default (which doesn't happen at 38% down). </p>

<p>After a certain amount, the rest becomes excess cash. It takes some patience, but it can be done. I'm just hoarding everything liquid when things get REALLY bad. Say interest rates go up to XX digits again. My loans are secured at low rates, but I'll put the liquids in accounts that are MUCH higher interest. Anyway, just my way of keeping my options open while still getting what I want.</p>

<p>50% down with a 5% cap rate? Its too expensive unless the land is appreciating at a terrific rate.... Again this is just people asking WAY too much for their property. </p>

<p>good luck</p>

<p>-bix</p>
 
Bix,

<p class="MsoNormal">I appreciate the reply. Yeah, I agree the commercial market like residential is overpriced. </p>

My objective has been to buy and hold for cash flow. Unfortunately, nothing pencils out with those low cap rates. Not to mention, I’d have to put a chunk down (50%) to make break-even in some cases. When you bought were you positive or did you have to carry it for a few years before being positive? Finally, since I’m not familiar with multi-family, on the deals you look at presently would putting 30-40% down make you positive from the start. Thanks for the feedback.
 
<p>Ten, </p>

<p> Well, I look for cirsumstances to fit the model. I always buy down to make the model cash flow, why would you do anything else. Unless you need a money sink, and i'm not nearly in that pay catagory... . </p>

<p>Most things I look at need between 45-60% down to make it cashflow. Or you need to start getting interesting financing schemes (which I do not recommend). I just start lowballing people from a long time back and try to get them to come down. Cash has a GREAT way of doing that to people. Also become friends with bankers, loan officers (commercial) and real estate agents. DO NOT be afraid to offer a little bit of "incentive" to go out and find the deals that fit your needs. Its just like everything else, you need fight, scramble, weedle, work and whore your way to what you want. I just do with cash though.</p>

<p>-bix</p>
 
Bix,

<p class="MsoNormal">Grateful for the insights. You make some very good points. </p>

Most of all I think its perspective that I’m really lacking. Lately, I’ve been very discouraged by the process. Some of the listing agents I've contacted, indicating I wanted to make an offer, are hesitant to write-up anything that isn’t close to list price. It seems ridiculous
 
<p>I went looking in Huntington Beach if that's any indication. </p>

<p>If it were me, i'd probably wait a little bit until the condos in Avenue one get a little cheaper. Then pick up 3-4 units (of course you have ALOT more negotiating power with multiple units. If you can get your cashflow to an extra 1-2k a month and then slowly raise it 5-7% per year (starting at 5% initially). Of course these are going to be a LONG haul investment (3-7 years). That area in 10 years should be quite the hopping area because of the school as well as the growth.... But again, its all speculation since there are about 10 buildings withing WALKING distance. Maybe if the price goes down enough you can pick up ALOT more properties.</p>

<p>Have you tried looking in mission viejo or maybe aliso?</p>

<p>-bix</p>

<p>p.s. I have a buddy who is a slumlord in Long Beach, he own well over 100 units now. </p>

<p> </p>

<p> </p>
 
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