New to the forum and investing

Just wanted to say hi and that I am new here. I am currently looking at investing in a multifamily (12 units) and would love a little help. I am having a hard time financing the property because the banks are wanting 25% down and with a 425000 asking price and being right out of college its a little tight. I have no student loans but have a truck and boat payment. Anyways I was wondering if anyone would have some help.


Youre just out of college and you want to buy a 12 family? That’s kinda funny…what experience do you have in REI? There’s a reason that the bank wants 25% down-thats a large sum of money to lend out, regardless of your investment level! do you have a real estate background, experience with property management, whats your personal credit, how much money can you put into the deal?

i’d start with a single family and manage that for a few months before trying a multi. if you find tenants arent for you, you can sell a single family much quicker and easier than a multi. at 425k asking price, does it need work and how much rent per unit are you expecting?

Its actually me and a buddy investing in it. We will have the current property manager manage it. Rent is averaging 500 right now but I would like to get 525 by end of 2010. I got a copy of their financial statement and their income without the mortgage is 39000 a year with the mortgage is around 18000 a year. Their are 10 tenants currently living thier that range from 8ys to 6 mo. Its in a great area 1/2 mile from airport and 1/2 mile from major mall. Their is owner financing available but they want a 22000 down payment. That would pretty much dry up our cash reserves if we did invest in the property. We would pay the owners mortgage for 3-5 years and then have to purchase property out right and get a credit for the payments that we had made. Is it going to be worth it? Will purchasing this property and then in 3 or 4 years trying to buy my own house hur tmy chances at getting a loan then?

i personally would not do this deal. 525/unit for 12 units is 6300/month. i dont know the area but on a pure cashflow basis i wouldnt want to be into this for 425k. you are also saying absolute 0 in repairs and a 22k mortgage would dry up your reserves? id offer a number that works for me and if they dont like it, move on to the next one. it’s a buyers market


I am kind of in your shoes as I am I am new to real estate and I started out with multifamily. In theory, multifamily buildings are better in my opinion compared to SFH. That’s my personal opinion.

Being out of college - do you own or rent? First step is to buy your own house and get that tax credit for first time home owners if you never owned a home before. That is what i did in my case.

The deal that you described seems overpriced. Not sure where you invest, but I bet that if you go on for example, you can definitely find much better deals there sitting on the market for a long time.

Good luck!

I rent right now only because it is a very cheap price for the nice place that it is in the country (350). Anyways the APT I found was on loopnet actually and I may tour the property and then shoot them a figure that works.

How long of mortgages do you guys try to finance for? I was running my figures with a 15 year mortgage

We have 10 yr amortizations on most of our properties.
I agree with the others. The income is not there for this property. One thing to look at when considering these smaller multi-unit properties is who pays for what utilities. Does the owner provide water/sewer, trash, common area electric, all the electric, gas, etc?

how much income per year per unit do most of you expect from a property after all expenses and the mortgage?

How much per year does property management run?

I want to invest and let the property manager do the rest.


I am new to REI as well. However I have choosen a different route. Right now I am investing as a (silent partner, novice lender, deed of trust holder, beneficiary?). I am getting a very nice return which I use to roll into bigger lending deals. I am building up so that I can get into self storage.
I am also listening to Jason Gilberts CDs right now as well. They seem like they are packed with good stuff. I will find out after I have enough cash to get into the market.
If you only have 22k why don’t you hold off for awhile and build your worth a bit and take some time to learn first. I am not saying I will know how to do everything when I get in, but I want to be as prepared as I can so I don’t pay “Califonia Prices”.