How To Buy Multifamily Without Significant Out-of-pocket Money
My goal is to own a good multifamily property (15+ units) and then manage them and live off the cash flow. I will need about 50K positive cash flow to support my existence. In order to get that kind of cash flow, based on research in my local area, I should be looking at 1.1-1.5 million worth property that would yield such a cash flow. Now, that would classify as a commercial loan and 25% down payment. We are talking atleast 300K in downpayment. I don't have that kind of money. I have about 100K to invest. How can I get around the balance of 200K and thereby get started with multifamily investing. Has anybody done this? Thanks.
Theoretically, if you find a really good property with strong cash flow and have good credit, a mortgage broker should be able to get you 80% LTV. You could then get the seller to carry 10% and put down the other 10% (your $100k). However, before you do, read this article. It's a great article on how people who tend to put less down can end up "upside down":
http://www.****This URL Not allowed****.com/articles/art-203.html
Maybe it's just me but 50K in cash flow for 1.1 to 1.5 million in assests does not seem like that great of a deal ROA is 3.3%. Although ROE is 50% for a 100K investment. What is the Cap Rate?