Bp is selling what's possible. It's simple but it's not easy. The trend in the comments here is to be negative and point out ways this doesn't work. You people are missing the point entirely. That attitude is why 99% of you will still be 9-5 and/or renters forever. Change your situation by changing your mentality
When my dad built our logos in 1980s interest rates were 20% and the current generation knows nothing about saving their money. Unfortunately that's their problem.
I’ve been buying single-family homes and would really like to get into the multifamily space there just aren’t many options where I’m at unless you build it from the ground up or buy a shitty HUD Apartment that is falling into disrepair
If you don't mind me asking, what's your longer term plan with the properties? Do you have a way of increasing the rent over time? What is your exit strategy? I'm a rookie realtor so I'm trying to figure all of this out lol
Unless you are fortunate enough to find a seller willing to do creative financing, you must have money for a large down payment. I have found with the 3-4 units I have purchased that the cash on cash return has not been great. The cash flow is positive but it will take along time for me to recoup my down payments even after raising rents. I actually had success in sending out letters to off market sellers in my area. I sent out about 200 letters using a platform that was referred to me and I sent out 100 letters and got 15 call backs. Most were 5-30 unit buildings. Most were out of my price range and even with the sellers willing to be creative, the down payments requested were high. Some sellers even had multiple properties. If interest rates were lower I may have moved on a few of them.
Seems like the best thing to do is this- Get yourself in one of your rental units, renting the other apartments. Now you don't have a mortgage or a lot of help. Then save the money. After you save buy another to get you net positive, then buy another and then another. I think I'll utilize the 4 unit approach. Get four units under my belt, then pay off the first one. Add another unit, then pay off the second. Add another then pay off the third, continuously buying larger and higher quality properties when available. What do you think?
It’s all about house hacking when you want to start out. It’s a no brainer when you have rooms, lofts, garage that’s converted that is just sitting there not making any money when you can turn that into money! 💵💵
I feel like much of this content is based on the assumption of continued market appreciation. I just house hacked my first building a few months ago, and I have the same amount of cash on hand now that I had when I started. I thought, based on all these videos that I could just go out and buy a second building but that's easier said than done. We can only have one FHA loan at a time, and interest rates have risen so much that I can't reasonably refinance my existing FHA. Plus I have no equity since I went FHA to begin with. It seems like without market appreciation I'm SOL - so to buy a second building I'll need much more cash down than I did for my first because I'll need a conventional mortgage this time. If this was 2021 I'd already have some equity in my home and I could refi out of the FHA in order to buy another building with an FHA but that doesn't seem practical in the current market
Im in the same situation. Ive had my triplex that i got with FHA. Even though I do have some equity refinancing at a almost double the rate wont be a good idea and will hurt my cash flow tremendously. My plan is to save as much as I can and use creative financing on the next deal.
Love how he makes it sound so easy. Doesn’t mention vacancy costs, maintenance, repair, legal issues. Not really doing anyone new to the business any favors with this overly rosy picture of how great rental properties are. Especially people without lots of cash reserves to deal with the unforeseen costs.
If you are brand new and watching this and you put as little as $12, 000 down on a older home, your annualized return will be skewed because you will have a lot of issues over the next few years. You need to put in a lot more money up front to change out old systems in order to keep things from breaking.
I am going to listen to this webinar with an open mind and let go of my frustration. I am motivated to buy a small multi family. I am FHA approved, have down payment, and closing cost, but I can not find a property on Daytona Beach FL with numbers that make sense. The looking process is giving me ulcer
Heyo 23 here closing on my first Multy family home in 9 days I don't know what the future holds for me but I know I can set myself up for success so long as I'm willing to act
I have to do this. SSI and combat disability just isn't a way to live. This week, SSI numbers were hacked across the USA, that made me make the decision to pursue. Seven university degrees, 32 years of military service and I am broke, and I am sick of it. I am 65 years of old, no savings, 401K is gone, I have no choice.
Good luck! That sounds like a good decision. Im worried about someone in my life with the same financial situation and similar age as you. I want to convince him to start too.
I'm a year late watching this video but, it's exactly what I'm looking for in a webinar. Looking for our first multifamily unit and as new investors, this gave me more confidence to move forward on making our first purchase.
Live on a tight budget, cancel your Netflix, eat mac n cheese, save everything you can, work on your credit, work hard at your job, and buy a dump somewhere. Make a ton of low ball offers until some desperate person takes your offers. Hypothetically. Lol.
I want to totally submerse myself into real estate and do this for a career to be financially free. I've bought 3 of y'all's books and I'm watching all the videos. But I need income atm, where do I go and why title do I start to apply for in order to be around this all the time to learn? Real estate Agent is definitely NOT the right answer bc I've learned that much by these videos. I've seen many videos where they say "Raise money" or "I raised 250k and didn't have to take out a loan". Where I'm from , & with the people that I know this isn't concept... Can someone PLEASE explain "Where do I go to raise money? Who do I talk to? How do I do this?
unfortunately a lot of people tout "raising money" as a simple thing to do. often times it is not . but here is the REAL way to do it but it will take a few months. FIRST you need to start networking. attend local real estate meet up groups, and join online meet up groups. talk to people in person and online. there a lot of people with money at these places who want to invest in real estate but dont' have the time or energy or know how to hunt for deals. while you are doing this you need to start learning how to see value. whatever market you are interested in investing in you need to start looking at it daily. and figuring out what is overpriced, under priced or average priced. once you can "run the numbers" and show what a good deal is, now you have a skill. you can see value. you can explain why a certain property IS a deal and then you can convince people to invest in it. if you can then go back to those meetups and definitively SHOW why the deal you are looking at is a good investment that is how you convince people to give you money to do the deal. IT IS MUCH easier to convince people to invest with you if you have a track record of success already. so in my case 4 years of experience and 10 units owned multiple seller financed deals and successful BRRRR's it is EASIER for me to say THIS is a good deal and sound educated and authoritative on the subject. if you are a newbie this is very tough. NOT IMPOSSILBE but tough. hit me up on Instagram or here on CZcams if you have questions.
I'm excited to house hack next year and do some potential flips? My step dad knows everything about fixing up a home so I was thinking about working with him and learning from him.
YOU ARE ON THE RIGHT PATH! i started with a house hack 4 years ago. best financial decision i ever made and now i have 10 rental units and a ton of cash flow. i'm closing in on financial freedom and retiring early all because i started house hacking 4 years ago. feel free to reach out sometime because i'm happy to help you in any way i can. good luck.
Bigger pockets is selling bigger pockets work shops and cheat sheets and guides this works if you can find cash flow property. Keyword cashflow but people are crazy in there asking prices especially with today's interest rates you cant even find a duplex for under 500k in the Pacific Northwest that doesn't even break even cash flow wise.
newsflash BP, prices aren't the same as they were in 2014 and rates are 3x of a year ago. There is absolutely no way it's even 1/10th as easy in this market as you make it sound. you bought at the bottom years ago and now newb investors can barely hope to break even yet you're all over here like "MF is still the best." okay, pre-2020 it was. Personally i believe in MTR SFH which is what i invest in.
i own several single family homes, but i love duplexes 3plexes and 4plexes and have an offer going in on a 3plex tomorrow. the right deal especially when combined with seller financing can be a game changer. i agree the market has changed. BIG TIME but this has opened up more opportunities for seller financing.
@@MillennialMike am glad to hear it. would you say its a good idea to hold out for a 3-4 plex with seller financing? i have a VA loan but am having difficulty getting approved because they are $600-700k, and the loan cannot take in to account other rents unless I have $40k saved up (6 months worth of all mortgages). tia.
@Gaye Lorde that's very, very unlikely to happen. I don't know if it would be possible to find even one instance in history (in the US at least) where a building boom led to rent declines. Large scale rent declines are extremely rare and the only cases I'm aware of were because the economics of the region led to lower demand for housing (e.g. Detroit and the decline of auto industry jobs). If there was even the slightest chance of rents going down, large developers wouldn't be building, because they would be the ones hurt the most. New construction, built with today's material and labor costs, is more expensive than existing MFH properties that were built with the costs of 20, 30, or 40 years ago. The target demographic of those new rentals also expect more premium quality than the building standards of decades past. So the developers HAVE to charge higher rents just to break even.
I have a question: I cannot wrap my head around DEBT. Good Debt. Is the idea to make sure your properties cash flow and remain in debt forever? Whether it's SFH, MF, or Apartments? Pay your mortgage, collect the rent, make sure it's net positive? It's been ingrained in my head growing up that debt is bad. All we care about is to NOT be in debt. Feels like in real estate investing you're always in debt? If things don't work out with a property, cut the losses and sell it?
The idea is to take out good debt that, after buying the right asset, produced enough income to service that debt, build reserves while you make the spread on the rest. Doing so allows you to not only cash in on the cash flow monthly, but directly benefit from the tax advantages, directly benefit from the appreciation long term and directly benefit from year over year rent increases..you get all 100% of the benefits while only Having to bring 20-25% of the money (downpayment) to do so. Good debt is GREAT when used correctly.
@@chani9669 like he said you use the debt just to invest and reinvest over long term ,while over time, you compound your asset’s value through tax benefits and appreciation fairly easy. You want to keep adding value to your asset portfolio by using the same debt to keep reinvesting. I think you’re looking at it as an early “exit strategy” in that case, if you have only a small amount of assets and want to exit, then you lose the tax benefits of holding your asset, pay capital gains tax on the money from the sell of the asset, and then you still have to pay off that debt for the asset. Of course all while losing any cash flow you were generating off that asset.
@@jeremymac3 Thanks. I have a couple SF homes that I paid for cash, and collect rent on, needless to say, I pay a lot in taxes. Recently closed on another but for the first time on a loan. At 6.999% not much Cashflow, just trying to understand that it’s normal to pay the monthly payment and be ok with that 15/30yr terms. I understand the rental income would cover servicing the debt. At what point would one “pay off” that home?
I've seen many videos where they say "Raise money" or "I raised 250k and didn't have to take out a loan". Where I'm from , & with the people that I know this isn't concept... Can someone PLEASE explain "Where do I go to raise money? Who do I talk to? How do I do this?
@@njerseydavid I'm inclined to agree with you. Every rich adult I know basically had rich parents that birthed them into the family business. Just trying to find a way out of this sh!tty ratrace...
Why does he assume the average rent he is looking at does not include utilities? If it does and people will only rent for $900 including utilites this deal will have no positive cash flow. Around 49 minutes.
I understand you got his first deal and it changed his life entirely. why didn’t he go over how much money he initially put down and sell and then how much that money total between all of his partnerships?
Rates are around 7.65 on investment multi with points. Question is, do you buy it if it doesn’t currently hit the cash on cash, but it will when rates drop.
You gotta be cash flowing day 1 you rent it or you have a bad deal. Gotta negotiate the price, figure what itll rent for and run the numbers to make it work for you. If no cash flow then dont go for it. Make it work for you , it's your investment
Great source- having watched many many like cardone etc this gent is genuine...as a CFA charterholder I agree you don't need to be a quant to understand T12s and cap rate/ROIs
@@Commercial_Investmentsif you enlist in the military, you’re technically eligible for a VA loan after boot camp I believe. I did seller financing on my first deal though actually. I had good finances but I wanted to put the property under an LLC so that’s when I didn’t go for a bank loan
@@Commercial_Investments I got approved as a younger enlisted and it would have been much more than I could have afforded on my own. But I house hacked rented the other room, and sometimes the couch while people transitioned out of the military
100 bucks per unit for financial independence if nothing breaks. If stuff starts breaking you will just need another 50 properties to cover the first fifty properties
My name is Renee from Va. . The vacation property I’m considering is I believe a good deal. However the agents and sellers have withheld their income & expenses except on a 2016 p& L.
i like how every bigger pockets video last few years is always, "oh this is an awful deal.... it doesnt work, so let's change it completely w/ numbers that won't ever happen, to make it work"
3.5% on a multifamily? I’m not sure about that. I talked to 10+ lenders in Florida and other states and 15% down owner occupied was the best thing they could offer. Not even 5-10% down for 2-4 unit. This has been the last 6 months ( Oct 2022 - March 2023). I think the rules have changed or lenders are not offering those kind of loans to new investors. What am I missing?
42:12 I am confused how $400K property went to $165K purchase price. Did I miss something? Appreciate the content and the topic of your video. Great job!
I live in Milwaukee.. it’s because that area is the ghetto and there are currently other SFH’s listed in that neighborhood for $17k. Nobody is staying in an Airbnb over there or paying $900/month. It’s terrible over there.
Looks like they edited it and cut it but they chose a different property. The $400k option they were going with was in IA. The $165k option they started analyzing was in WI.
With the BRRR strategy aren’t you technically raising monthly mortgage payments after the cash out refi? How will you stay cash flow positive on that property when that happens?
If you buy low enough and stay on rehab budget you can pull your money back out the deal and stay cash flow positive after refi. And rents will increase over time.
You are only refinancing at 75% to 80% of the market/ARV. This would be the same as putting a down payment of 20% to 25%. Its up to you and your analysis to make sure its a good cash flowing property.
The point in that a lot of people miss though, is that is exactly why real estate dudes are broke.😂 gotta get that next deal, it’ll pay off down the line.
David and BP podcast team. I have been listening for a couple years . I would like to go back to some basics. Can you guys go over all the acronyms and explain them and how to use them. ROI , COC , annualized return % and many more. I’d love to hear you guys go over all these in detail and explain the calculations to get the numbers and how these numbers help us make better decisions and the role they play when analyzing a deal. I’m still a newbie. Just bought my first rental this summer . I need to learn more about the information the BP calculators give me to better use the info to my advantage. Thanks guys
So with financial freedom, In another video just released it was said that he takes a lot of times 7-9 years to start making positive cash flow. So If you have a loan and you’re breaking even or taking a small loss, let’s just say breaking even. How do you come up with the rest for repairs? Pluming needs to be done, tenant doesn’t pay rent and needs to be evicted. How can you cover this, never mind trying to take money out of the cash flow to pay yourself. Also second question, say you can pull a small profit after the loan, like +200 a month. How much do you put in an account to let sit for repairs or missed rent? Is there a book or website that talks about this?
I dont have exactly the answer to your question, but I hope some perspective that's helpful. I work as a property manager (managing 55 single family homes) and, yes every now and again someone needs to be evicted or skips a lease and caused damage but if you're working with a triplex, 4plex.. usually the others will balance it out of theres an issue. That's also where some work comes in, setting good criteria to get the right renter (credit score, previous history etc.). My experience with investors and managers is many still work a w2 (or run a business) for some time before relying solely on their real estate. Real estate is simply an asset unless you build it into a business, certainly not a one and done situation.
"You can find a fourplex and it will cash flow". They make it sound so simple. Nowadays, the prices for a multi are so high that it makes it impossible to cash flow. Especially where I live in Boston. 🤦♂️
invest at a distance. i got tired of not finding reasonable properties in SEATTLE where i live, even more expensive than boston. so i started investing in the midwest. 4 years and 10 properties later..... i'm killing it and have an offer going out on another building (triplex) tomorrow. wish me luck
a Multi-Generational Family House and/or a place with 2 stories (or 5 stories: with people who are not relatied to each other) = Monster House(s)/Homes
This made sense until $150/month income? How is that worth all the trouble? I'm really hoping to get into RE investing but I need it to make sense. Obviously I know this was a dummy example, but still...please help me understand
I am looking at a property but the seller has not only closed it for a year. He won’t give me current financial ,how can I get records/ ?Also I think he might finance. How can I approach him and rate to offer?
What they never or seldom mention on small multi or single family rentals is buying all cash 80% of arv minus repair and holding cost. Guess those deals must be hard to find. I can't wrap my head around any kind of down payment. That's my operating capital down the drain that I won't get back to reuse anytime time soon.
I would like to get an FHA loan and willing to live there but I travel most of the year. Is there any kind of regulations that said that I need to habitate the residence ?
2023, current market: I llive in California. I saw multi family homes for sale around my area. 600k for a duplex and is currently being rented. But rent is less a little over 1k. I mean, if I will buy it for 600 k plus 7% interest rate, thats about 4-5k/mo mortgage, and the rent is undermarket, how do I get cashflow from it? 😢
Hi Bigger Pockets stuff, first of all thank you for your amazing contents and thank to you I found real estate fun and interesting. I would love to get the Pro but I live, and do deals, in London so I don't know if this can tangibly helping me. Is there anything that we can do to solve this concern? Thank you Dave, thank you Brandon, thank you David and thank Rob and thank you to all BP stuff🙌🙌🙌
Bp is selling what's possible. It's simple but it's not easy. The trend in the comments here is to be negative and point out ways this doesn't work. You people are missing the point entirely. That attitude is why 99% of you will still be 9-5 and/or renters forever. Change your situation by changing your mentality
It’s actually as easy as making a decision and acting on it.
When my dad built our logos in 1980s interest rates were 20% and the current generation knows nothing about saving their money. Unfortunately that's their problem.
I’ve been buying single-family homes and would really like to get into the multifamily space there just aren’t many options where I’m at unless you build it from the ground up or buy a shitty HUD Apartment that is falling into disrepair
They just scared of investing they’re stuck in the rat race and don’t know the power of OPM. leave them pessimistic people alone. God bless 💯
Honestly mindset is everything at the end of the day
2-4 units are pretty good investments. I had one 4-unit while I was in college. I plan to get 2- 2-flats every year for next few years
If you don't mind me asking, what's your longer term plan with the properties? Do you have a way of increasing the rent over time? What is your exit strategy?
I'm a rookie realtor so I'm trying to figure all of this out lol
@@ThoughtfulStoic I’m buying 2-3 2-flats per year. I plan to hold them for 10-15 years for cash flow then I will sell them
@@ThoughtfulStoickokimmjikj kiniik
Unless you are fortunate enough to find a seller willing to do creative financing, you must have money for a large down payment. I have found with the 3-4 units I have purchased that the cash on cash return has not been great. The cash flow is positive but it will take along time for me to recoup my down payments even after raising rents. I actually had success in sending out letters to off market sellers in my area. I sent out about 200 letters using a platform that was referred to me and I sent out 100 letters and got 15 call backs. Most were 5-30 unit buildings. Most were out of my price range and even with the sellers willing to be creative, the down payments requested were high. Some sellers even had multiple properties. If interest rates were lower I may have moved on a few of them.
Seems like the best thing to do is this-
Get yourself in one of your rental units, renting the other apartments.
Now you don't have a mortgage or a lot of help. Then save the money. After you save buy another to get you net positive, then buy another and then another.
I think I'll utilize the 4 unit approach. Get four units under my belt, then pay off the first one. Add another unit, then pay off the second. Add another then pay off the third, continuously buying larger and higher quality properties when available.
What do you think?
Rehab the house. Refinance it. Take that money and repeat
Small multifamily is a great way to start. It worked for me.
How much was the down payment u put on it?
When did you get started? Economy and market make a HUGE difference to how great a start it can be.
Yes! My clients love buying multi-family properties and it’s so easy to see why
Interested in selling some Rivendell properties?
It’s all about house hacking when you want to start out. It’s a no brainer when you have rooms, lofts, garage that’s converted that is just sitting there not making any money when you can turn that into money! 💵💵
I feel like much of this content is based on the assumption of continued market appreciation. I just house hacked my first building a few months ago, and I have the same amount of cash on hand now that I had when I started. I thought, based on all these videos that I could just go out and buy a second building but that's easier said than done. We can only have one FHA loan at a time, and interest rates have risen so much that I can't reasonably refinance my existing FHA. Plus I have no equity since I went FHA to begin with. It seems like without market appreciation I'm SOL - so to buy a second building I'll need much more cash down than I did for my first because I'll need a conventional mortgage this time. If this was 2021 I'd already have some equity in my home and I could refi out of the FHA in order to buy another building with an FHA but that doesn't seem practical in the current market
You’re also only a few months in! Trust in the process!
Im in the same situation. Ive had my triplex that i got with FHA. Even though I do have some equity refinancing at a almost double the rate wont be a good idea and will hurt my cash flow tremendously. My plan is to save as much as I can and use creative financing on the next deal.
@@anthonyrawles1154 Way to think things through. Sit on what you have and continue to stack it up
Owner occupied loans on duplexes and remember real estate is usually a 20 year minimum until you’re rich it’s meant to be safe long riches not short
@@deving1102 Airbnb
Love how he makes it sound so easy. Doesn’t mention vacancy costs, maintenance, repair, legal issues. Not really doing anyone new to the business any favors with this overly rosy picture of how great rental properties are. Especially people without lots of cash reserves to deal with the unforeseen costs.
Being negative doesn't help either. He's just showing what's possible. Some people need a mindset change
I'm so grateful for this information. I want to buy a 4-plex within the next 3-5 years, so I'm hanging on to your every word.
Why did the analysis at around 39:00 cut from him looking at a $400k Iowa property, to suddenly showing a $165k Wisconsin property?
That's where he lost credibility with me.
Because cashflow looks better on a 165k property and is negative on a 400k property.
That’s what I was wondering too! Lol
If you are brand new and watching this and you put as little as $12, 000 down on a older home, your annualized return will be skewed because you will have a lot of issues over the next few years. You need to put in a lot more money up front to change out old systems in order to keep things from breaking.
Also note that you can purchase newer homes that will have less issues, but you will pay more which will likely make it not a deal
I am going to listen to this webinar with an open mind and let go of my frustration. I am motivated to buy a small multi family. I am FHA approved, have down payment, and closing cost, but I can not find a property on Daytona Beach FL with numbers that make sense. The looking process is giving me ulcer
Heyo 23 here closing on my first Multy family home in 9 days I don't know what the future holds for me but I know I can set myself up for success so long as I'm willing to act
I don't know you but I'm so proud of you the future is bright
How’s it working
I have to do this. SSI and combat disability just isn't a way to live. This week, SSI numbers were hacked across the USA, that made me make the decision to pursue. Seven university degrees, 32 years of military service and I am broke, and I am sick of it. I am 65 years of old, no savings, 401K is gone, I have no choice.
Good luck! That sounds like a good decision. Im worried about someone in my life with the same financial situation and similar age as you. I want to convince him to start too.
Price is 400k, so let's put in 165k into the calculator. Whaaaaaat?!
Wow, 15 minutes in and 4 commercials before we actually start talking about real estate..... So glad I have premium
" The Path is all math" !! Great content, THANK YOU!
I'm a year late watching this video but, it's exactly what I'm looking for in a webinar. Looking for our first multifamily unit and as new investors, this gave me more confidence to move forward on making our first purchase.
What if my neighborhood is too expensive. I don't even have my own house
Live on a tight budget, cancel your Netflix, eat mac n cheese, save everything you can, work on your credit, work hard at your job, and buy a dump somewhere. Make a ton of low ball offers until some desperate person takes your offers. Hypothetically. Lol.
I want to totally submerse myself into real estate and do this for a career to be financially free. I've bought 3 of y'all's books and I'm watching all the videos. But I need income atm, where do I go and why title do I start to apply for in order to be around this all the time to learn? Real estate Agent is definitely NOT the right answer bc I've learned that much by these videos.
I've seen many videos where they say "Raise money" or "I raised 250k and didn't have to take out a loan". Where I'm from , & with the people that I know this isn't concept... Can someone PLEASE explain "Where do I go to raise money? Who do I talk to? How do I do this?
unfortunately a lot of people tout "raising money" as a simple thing to do. often times it is not . but here is the REAL way to do it but it will take a few months. FIRST you need to start networking. attend local real estate meet up groups, and join online meet up groups. talk to people in person and online. there a lot of people with money at these places who want to invest in real estate but dont' have the time or energy or know how to hunt for deals. while you are doing this you need to start learning how to see value. whatever market you are interested in investing in you need to start looking at it daily. and figuring out what is overpriced, under priced or average priced. once you can "run the numbers" and show what a good deal is, now you have a skill. you can see value. you can explain why a certain property IS a deal and then you can convince people to invest in it. if you can then go back to those meetups and definitively SHOW why the deal you are looking at is a good investment that is how you convince people to give you money to do the deal. IT IS MUCH easier to convince people to invest with you if you have a track record of success already. so in my case 4 years of experience and 10 units owned multiple seller financed deals and successful BRRRR's it is EASIER for me to say THIS is a good deal and sound educated and authoritative on the subject. if you are a newbie this is very tough. NOT IMPOSSILBE but tough. hit me up on Instagram or here on CZcams if you have questions.
*immerse
@@allthecommonsense Submerse is more applicable to my example. Thanks 👍
@@Paragon_Reason it actually isn’t. Unless you’re implying your plan is for your investments to all be underwater, I suppose.
@@allthecommonsense Google is free.
I'm excited to house hack next year and do some potential flips? My step dad knows everything about fixing up a home so I was thinking about working with him and learning from him.
YOU ARE ON THE RIGHT PATH! i started with a house hack 4 years ago. best financial decision i ever made and now i have 10 rental units and a ton of cash flow. i'm closing in on financial freedom and retiring early all because i started house hacking 4 years ago. feel free to reach out sometime because i'm happy to help you in any way i can. good luck.
Love this. I have clients who both bought and sold small multi family properties. I plan on doing it myself. I'm in the DMV and Baltimore markets.
I’m in that area as well and looking to get into multi family real estate investing! Are you a realtor?
Valuable content starts at 14:34.
Thanks! Yep, the intro went on too long.
I like the shirt 👍🏿🇺🇸
Me too
Love this advice. I’m an agent here in Northern California and help investors find deals that match their criteria. 25:14 ❤
Do you work out of state clients?
How about Sacramento rental control?
Ive almost saved enough for my first one
Bigger pockets is selling bigger pockets work shops and cheat sheets and guides this works if you can find cash flow property. Keyword cashflow but people are crazy in there asking prices especially with today's interest rates you cant even find a duplex for under 500k in the Pacific Northwest that doesn't even break even cash flow wise.
newsflash BP, prices aren't the same as they were in 2014 and rates are 3x of a year ago. There is absolutely no way it's even 1/10th as easy in this market as you make it sound. you bought at the bottom years ago and now newb investors can barely hope to break even yet you're all over here like "MF is still the best." okay, pre-2020 it was. Personally i believe in MTR SFH which is what i invest in.
Just bought one in Chicago. Cash flowing $150/door right off the bat with 10%down
i own several single family homes, but i love duplexes 3plexes and 4plexes and have an offer going in on a 3plex tomorrow. the right deal especially when combined with seller financing can be a game changer. i agree the market has changed. BIG TIME but this has opened up more opportunities for seller financing.
@@MillennialMike how do you get seller financing deals?
@@MillennialMike am glad to hear it. would you say its a good idea to hold out for a 3-4 plex with seller financing? i have a VA loan but am having difficulty getting approved because they are $600-700k, and the loan cannot take in to account other rents unless I have $40k saved up (6 months worth of all mortgages). tia.
My cousin bought single family for 105k cash flowing 400 in PA
This info is GOLD. Thanks, Dave!
I reached to many agents to ask for multifamily that just covers the mortgage and was told those measures are unrealistic in this market.
@Gaye Lorde that's very, very unlikely to happen. I don't know if it would be possible to find even one instance in history (in the US at least) where a building boom led to rent declines. Large scale rent declines are extremely rare and the only cases I'm aware of were because the economics of the region led to lower demand for housing (e.g. Detroit and the decline of auto industry jobs).
If there was even the slightest chance of rents going down, large developers wouldn't be building, because they would be the ones hurt the most. New construction, built with today's material and labor costs, is more expensive than existing MFH properties that were built with the costs of 20, 30, or 40 years ago. The target demographic of those new rentals also expect more premium quality than the building standards of decades past. So the developers HAVE to charge higher rents just to break even.
You can find deals on the MLS sometimes. If you find something that looks good offer about 20% less especially in October or November
I have a question: I cannot wrap my head around DEBT. Good Debt. Is the idea to make sure your properties cash flow and remain in debt forever? Whether it's SFH, MF, or Apartments? Pay your mortgage, collect the rent, make sure it's net positive? It's been ingrained in my head growing up that debt is bad. All we care about is to NOT be in debt. Feels like in real estate investing you're always in debt? If things don't work out with a property, cut the losses and sell it?
The idea is to take out good debt that, after buying the right asset, produced enough income to service that debt, build reserves while you make the spread on the rest. Doing so allows you to not only cash in on the cash flow monthly, but directly benefit from the tax advantages, directly benefit from the appreciation long term and directly benefit from year over year rent increases..you get all 100% of the benefits while only Having to bring 20-25% of the money (downpayment) to do so. Good debt is GREAT when used correctly.
At the end of day, you’re in debt? Good debt, always?
@@chani9669 like he said you use the debt just to invest and reinvest over long term ,while over time, you compound your asset’s value through tax benefits and appreciation fairly easy. You want to keep adding value to your asset portfolio by using the same debt to keep reinvesting. I think you’re looking at it as an early “exit strategy” in that case, if you have only a small amount of assets and want to exit, then you lose the tax benefits of holding your asset, pay capital gains tax on the money from the sell of the asset, and then you still have to pay off that debt for the asset. Of course all while losing any cash flow you were generating off that asset.
@@jeremymac3 Thanks. I have a couple SF homes that I paid for cash, and collect rent on, needless to say, I pay a lot in taxes. Recently closed on another but for the first time on a loan. At 6.999% not much Cashflow, just trying to understand that it’s normal to pay the monthly payment and be ok with that 15/30yr terms. I understand the rental income would cover servicing the debt. At what point would one “pay off” that home?
@@chani9669dude u just let ur tenants pay off the mortgage and hopefully it’s paid in full by/before your mortgage end date
I've seen many videos where they say "Raise money" or "I raised 250k and didn't have to take out a loan". Where I'm from , & with the people that I know this isn't concept... Can someone PLEASE explain "Where do I go to raise money? Who do I talk to? How do I do this?
@@njerseydavid I'm inclined to agree with you. Every rich adult I know basically had rich parents that birthed them into the family business. Just trying to find a way out of this sh!tty ratrace...
Ask a lot of people I guess. Did you do anything yet?
Why does he assume the average rent he is looking at does not include utilities? If it does and people will only rent for $900 including utilites this deal will have no positive cash flow. Around 49 minutes.
Milwaukee rent is 900-1100? But in backshit Maine it’s 1000-1500 for an average single bedroom not in the hood… and up to 2000 for a nice place
I understand you got his first deal and it changed his life entirely. why didn’t he go over how much money he initially put down and sell and then how much that money total between all of his partnerships?
Amazing!
I invested in a retirement plan with ROI company and I'm very happy with the results. They offer great returns and excellent customer service.
Wow! this is truly fascinating to hear, please how do I meet this company's portfolio manager?
🏆
RE was cheaper before, they all say it is easy, yeah when the houses were $300k less
How come you don't talk about house hacking with a VA loan?
great Video david please update the bigger pocket tolls for Canadian investors please !
Rates are around 7.65 on investment multi with points. Question is, do you buy it if it doesn’t currently hit the cash on cash, but it will when rates drop.
You gotta be cash flowing day 1 you rent it or you have a bad deal. Gotta negotiate the price, figure what itll rent for and run the numbers to make it work for you. If no cash flow then dont go for it. Make it work for you , it's your investment
Great source- having watched many many like cardone etc this gent is genuine...as a CFA charterholder I agree you don't need to be a quant to understand T12s and cap rate/ROIs
Do you guys recommend getting a realtor or use the listing realtor when you find a good multi family?
I can't live with people. Is there another way to generate passive income
Thanks BP! Pro!
VA loan for those who can use it is a great way to get in also. 0% down no pmi and more
What about younger people I don’t even see how I’d get approved for a loan
@@Commercial_Investmentsif you enlist in the military, you’re technically eligible for a VA loan after boot camp I believe. I did seller financing on my first deal though actually. I had good finances but I wanted to put the property under an LLC so that’s when I didn’t go for a bank loan
Va loan will do 100% LTV as well on a cash out refi
@@Commercial_Investments I got approved as a younger enlisted and it would have been much more than I could have afforded on my own. But I house hacked rented the other room, and sometimes the couch while people transitioned out of the military
100 bucks per unit for financial independence if nothing breaks. If stuff starts breaking you will just need another 50 properties to cover the first fifty properties
If a tenant trashes the place and costs $2500. How they pay that?
Thanks BP for everything you do! I have a question: do you have any advice for expats interested in investing in real estate?
My name is Renee from Va. . The vacation property I’m considering is I believe a good deal. However the agents and sellers have withheld their income & expenses except on a 2016 p& L.
It seems like you need the seller to cut the price in half on most deals to be comfortable with the cash coming in to pay for everything
i like how every bigger pockets video last few years is always, "oh this is an awful deal.... it doesnt work, so let's change it completely w/ numbers that won't ever happen, to make it work"
Facts not getting a property for 150-165 and then renting for 1k each side. Not in todays market
3.5% on a multifamily? I’m not sure about that. I talked to 10+ lenders in Florida and other states and 15% down owner occupied was the best thing they could offer. Not even 5-10% down for 2-4 unit. This has been the last 6 months ( Oct 2022 - March 2023). I think the rules have changed or lenders are not offering those kind of loans to new investors. What am I missing?
FHA = 3.5% down
42:12 I am confused how $400K property went to $165K purchase price. Did I miss something? Appreciate the content and the topic of your video. Great job!
I live in Milwaukee.. it’s because that area is the ghetto and there are currently other SFH’s listed in that neighborhood for $17k. Nobody is staying in an Airbnb over there or paying $900/month. It’s terrible over there.
Looks like they edited it and cut it but they chose a different property. The $400k option they were going with was in IA. The $165k option they started analyzing was in WI.
2k more till 1 million subscribers. Shocked that bigger pockets doesn't have 1 million subscribers yet
Please recommend something in Canada
The Find Deals feature is pretty outdated, I've looked up a couple and they all already sold within the last 1-2 months
Just get on that MLS bro.
Tri-plex (3 units)
Not trip-lex (girl you meet on vacation)
(Sorry I'm an old English teacher)
How did you afford to pay for bigger pockets pro wen you first got started and hadn’t closed your first deal yet? How did you pay for it?
How much does it cost? I would imagine most people have jobs & savings and use their own money.
Love this! Thank you!
With the BRRR strategy aren’t you technically raising monthly mortgage payments after the cash out refi? How will you stay cash flow positive on that property when that happens?
If you buy low enough and stay on rehab budget you can pull your money back out the deal and stay cash flow positive after refi. And rents will increase over time.
I was going to say that with the new updated property you would charge more on rent.
You are only refinancing at 75% to 80% of the market/ARV. This would be the same as putting a down payment of 20% to 25%. Its up to you and your analysis to make sure its a good cash flowing property.
The point in that a lot of people miss though, is that is exactly why real estate dudes are broke.😂 gotta get that next deal, it’ll pay off down the line.
Get a Wedge Deal. Meaning: buy wholesale and sell retail
I live in Elizabeth, NJ and would like to be my first investment but the market out here sucks!!! Don’t know what to do 🤷🏻♂️
buy out of state
David and BP podcast team.
I have been listening for a couple years .
I would like to go back to some basics. Can you guys go over all the acronyms and explain them and how to use them. ROI , COC , annualized return % and many more.
I’d love to hear you guys go over all these in detail and explain the calculations to get the numbers and how these numbers help us make better decisions and the role they play when analyzing a deal.
I’m still a newbie. Just bought my first rental this summer . I need to learn more about the information the BP calculators give me to better use the info to my advantage.
Thanks guys
Keep watching their videos and visit their website. It'll all start to click.
Does BP have a good multi family analysis worksheet you can share?
❤great tips and wealth ideas! ❤
Thanks for posting
So with financial freedom,
In another video just released it was said that he takes a lot of times 7-9 years to start making positive cash flow. So If you have a loan and you’re breaking even or taking a small loss, let’s just say breaking even.
How do you come up with the rest for repairs? Pluming needs to be done, tenant doesn’t pay rent and needs to be evicted. How can you cover this, never mind trying to take money out of the cash flow to pay yourself.
Also second question, say you can pull a small profit after the loan, like +200 a month. How much do you put in an account to let sit for repairs or missed rent?
Is there a book or website that talks about this?
I dont have exactly the answer to your question, but I hope some perspective that's helpful. I work as a property manager (managing 55 single family homes) and, yes every now and again someone needs to be evicted or skips a lease and caused damage but if you're working with a triplex, 4plex.. usually the others will balance it out of theres an issue. That's also where some work comes in, setting good criteria to get the right renter (credit score, previous history etc.).
My experience with investors and managers is many still work a w2 (or run a business) for some time before relying solely on their real estate. Real estate is simply an asset unless you build it into a business, certainly not a one and done situation.
30 minutes a loooooot of smoke and no fire.
"You can find a fourplex and it will cash flow". They make it sound so simple. Nowadays, the prices for a multi are so high that it makes it impossible to cash flow. Especially where I live in Boston. 🤦♂️
invest at a distance. i got tired of not finding reasonable properties in SEATTLE where i live, even more expensive than boston. so i started investing in the midwest. 4 years and 10 properties later..... i'm killing it and have an offer going out on another building (triplex) tomorrow. wish me luck
Great video! Really enjoyed it.
a Multi-Generational Family House and/or a place with 2 stories (or 5 stories: with people who are not relatied to each other) = Monster House(s)/Homes
Sounds like your just helping ppl who already have the means to buy anything they want David
that's my first goal, jusst one!
How do your investors make money? The rent is split between all 4 people after bills are paid? Or you slowly pay them back?
Don’t forget about the tax write off when you buy multifamily home
Thanks for posting!! Nice
This made sense until $150/month income? How is that worth all the trouble? I'm really hoping to get into RE investing but I need it to make sense. Obviously I know this was a dummy example, but still...please help me understand
I am looking at a property but the seller has not only closed it for a year. He won’t give me current financial ,how can I get records/ ?Also I think he might finance. How can I approach him and rate to offer?
Interest rate of 5.5%? Why not use current rate?
@@njerseydavid Noooo 😆
What about the Cash reserves you need for a multifamily?
Does BP have seller financing forms too? Wholesale form and sub to form?
Real estate investing is no brainer. Start now.
Thank you so much, awesome value!
Can u send me a link to join/
Also tell the surfer when a word starts with a vowel. So it’s an opportunity. A with a 😊 A job.
Great pod as always!!!
What they never or seldom mention on small multi or single family rentals is buying all cash 80% of arv minus repair and holding cost. Guess those deals must be hard to find. I can't wrap my head around any kind of down payment. That's my operating capital down the drain that I won't get back to reuse anytime time soon.
5.5% rate? What planet does this guy live on?
You guys dropped the ball by not trademarking “House Hack”.
Some dude in Cali is about to IPO with the name and he’s only buying SF homes.. 😅😅
Multi
love the grunt style shirt
how do I sign into loopnet
Any investor agents in the CENTRAL OHIO market?
Besides using bigger pockets pro, would you recommend becoming a realtor to learn about how things work?
Absolutely not!
54:25. In 10 years the home value went up $42k?? Mine went up $50k within 2 years. 😮
I would like to get an FHA loan and willing to live there but I travel most of the year. Is there any kind of regulations that said that I need to habitate the residence ?
Habitate the residence?
53:20 “Lower the purchase price” 😂😂
2023, current market: I llive in California. I saw multi family homes for sale around my area. 600k for a duplex and is currently being rented. But rent is less a little over 1k. I mean, if I will buy it for 600 k plus 7% interest rate, thats about 4-5k/mo mortgage, and the rent is undermarket, how do I get cashflow from it? 😢
You don't cash flow
Hi Bigger Pockets stuff, first of all thank you for your amazing contents and thank to you I found real estate fun and interesting. I would love to get the Pro but I live, and do deals, in London so I don't know if this can tangibly helping me. Is there anything that we can do to solve this concern? Thank you Dave, thank you Brandon, thank you David and thank Rob and thank you to all BP stuff🙌🙌🙌
You were looking at a$400k Des Moines property but you analyzed a $165k Milwaukee property.