hi all, ive been looking for a multi-unit property(2-4 unit) in the few areas that im focused on, and am having a hard time sourcing anything suitable. the problem im finding is that i cant seem to find any multi units that are occupied with steady, working class tenants. there are many occupied properties in the area, but the problem im encountering is that they are almost all A) not very well kept up, and B) not very stable histories of tenants.
i’ve focused on this segment, because it suits my priorities. of COURSE, an occupied prop with stable tenants in decent condition is worth a premium over anything else, and im willing to PAY that premium, the problem is im not finding ANY.
is this cause people just dont sell properties like that? should i give up on that search, and focus instead on buying a multi-unit that might need some work, and do the legwork of rehabbing and filling it with “good” tenants? rehabbing is not a problem, i have access to contractors and have done alot of rehab myself; its the sourcing of good, working class tenants that scares me, as ive never done it.
People generally don’t sell properties that are doing ok, in good condition, etc unless they are trying to move up into a different type of investment (or maybe some major life change like divorce, retirement, etc). Most of the time there will be work to be done on a property. Many LL’s squeeze the last dime of rent out of a place and never fix anything so the property goes downhill. Some of your working class tenants you are seeking will be good people who pay their bills on time. Others will be trying to live above their means and give you excuses why they don’t have the rent money while they have a new car in the driveway, new flat screen tv, etc.
You might find a near new construction building like you’re seeking, but I’m sure it will be priced very high.
my goal is to have just a few sustainable, long term multi-unit properties. maximizing cap rate, or profit margin, is not as important to me as being SUSTAINABLE.
so do you think it sounds like my best bet is to rehab a multi-unit and try to find some good tenants? one other option i have is to buy a single family home and chop it into multi-units. these are readily available in the areas in looking in.
Like Justin said. It’s rare to find properties like you mention because if they performed that well people wouldn’t be selling them, at least in my experience.
You’re on the right track. It’s best to rehab. Or perhaps you might consider commercial real estate like a small retail strip plaza that has five year leases signed with their tenants with post dated cheques if SUSTAINABLE is more important than profit margin.
Ditto the other responses, good condition properties in good areas with stable tenants rarely come up for sale. What to do…what to do? Of those that you’ve found that don’t really meet your requirements, buy the one in the best neighborhood with the best possibility of attracting stable tenants once it has been rehabbed/upgraded, but buy it a a dirt cheap price or don’t buy it. Put some time and money into upgrades. Upping the rent to reflect the new value will get rid of most of the current rif-raf. Get rid of the remainder by any legal means and replace them with quality tenants of YOUR choice. You’ll get what you’re looking for with the added benefits of increased ROI and built in equity.
tenants can move, worry about finding a property that will attractive good tenants, or rehab a property into the condition that will attract good tenants,a 2-4 plex won’t take long to lease if you have the best product at the best price
I am trying to make the transition to investing from being a rehab contractor. Maybe you could find someone like myself that can turn rehab's into turn key units. I'm in Pittsburgh but there has to be someone that has the skill to do so in your area. If you do decide to go this route I can give some ideas on how to work with the contractor and some of the pitfalls my investor have experienced with other contractor's.
GRIDcorp-please fill me in on the pitfalls your investor has seen. would always be helpful.
the plus side is that all the doom and gloom related to the housing market means-for better or worse-some opportunities should be arising in the next 6-18 months for buyers.
I think a person who has problem in finding the appropriate real estate property, would have different professional background or moved from far of area. As it is quite easy to find property but the problem is all about he money.
That is commonly a problem not just by you but for others who are looking for suitable properties. I would suggest that you gather information and the exact composition on what property you really prefer to come up with.