Are There Any 2-4 Family "experts"
I would like to begin investing in 2-4 family properties, mostly four familes. The SF market in this area (Cincinnati) is getting oversaturated as far as investing (everybody seems to be doing the same thing). I am interested in the passive income of apartment buildings. I am planning on following a Dave Lindahl type of program where I will not be personally managing the properties. I understand that the larger the building, the more income potential. I would like to get several two and or four families under my belt, which experience would then help me get financing on the larger deals. Is there anyone who invests specifically in four family or duplex housing? Does anyone know of any websites, books, etc specifically on this subject. I understand the finanacing is different, is there anything else to be aware of?
Tom,
I assume you are referring to section 8. If you notify the Housing Authority they will have you fill out a contract that appends to the lease.
Usually, HUD does not cover 100% of the rent. In my area the HUD check is mailed out early in the month. I usually receive it by the 4th. The tenant is obliged to pay their part of the lease amount according to the terms of the lease. If they fail, they could lose their section 8 support.
Regards,
Ed
groverm, do you typically buy buildings which need to be rehabbed or do you purchase buildings which are already operating with tenants?
I have done both, but I usually find that the properties that need minor rehab cash flow better once they are fixed and rented.
W James, I have the exact same question. I am trying to determine if I should hire a managment company or not for small properties. I plan on getting about 4, 4 families and then moving on to larger properties. In the long run I do want a managment company. I think I will begin by using one, even for the smaller properties because I want to be a business owner, not a landlord. My goal is to plan for the cost % of a managment company into my purchase price. I will only purchase properties that will cash flow even with a management co. I feel it will be better in the long run. Another reason is because I want to market to the growing Hispanic market in my area, therefore I need to hire a bilingual management co or person. If you do this make sure the management co. has experience in whatever you are investing in. They may say they do it all, but you want proven experience. For instance, I want a co. with section 8 and small property experience. If you are investing with a self directed IRA, you have to use a management co. or someone else to manage your property, because by law you cannot have anything to do with managing the asset. Also, if you go with a management co. make sure you find one that charges a % based off of the amount of RENT COLLECTED, not an overall % charge. That will give them incentive to collect as much rent as possible.
[ Edited by CBuford on Date 10/17/2005 ][ Edited by CBuford on Date 10/17/2005 ]
Are you getting four 4 famiies houses at one time or over several periods of time?? Would the lender allow you to do that?? What methods are out there that you can use to check the management company credentials?
I plan on purchasing them individually at different times. I will be dealing with lenders who deal specifically with investors. We actually have a bank here locally who has special peograms for investors that allow these types of purchases. 65% of their mortgage business is with investors so they understand the game.
You can go to http://www.irem.org/sec1ins.cfm?sec=joinirem&con=cpm_arm_aso_directory.cfm&par=
to research managment compaines. Also, we have managment companies who are members of my local REIA.
What kind of lenders are they? Are they banks? private money lenders? what % financing do they offer and whats their rates?
I am currently considering purchasing a 4 family (plus a small efficiency unit) so I guess its technically a 5 unit building. What options are there for conversion to section 8 targeting elderly when this property is zoned for up to 12 units. It is approx 5,000 sf. Would I need full handicap accessability including an elevator? Please help me think this through a bit. Thanks