RE Beginner - Are Multi-units The Way To Go?

I want to generate cash flow with the possiblity of appreciation. I don't have any trouble doing slight rehab work or simple repairs.

I've purchased a SFH (bank owned forclosure) with an uncle of mine 2 years ago for 60K +10K repairs and sold it for 120K 8 months later. My uncle wanted to hold onto it a little longer but since it was my first investment property i wanted to get out as fast as possible. I now realize that i should have held it for at least a year. i plan to do that in the furure. I could probably invest more with my uncle but the properties are about 1.5 hours away and I would like to do something closer to home.

Currently i have a 130k HELOC on my primary residence and am looking to invest it in RE. I have been looking for multi-unit homes, duplexes, small aptartments. I also have a friend that is looking to invest in real estate as well that could probably come up with the same amount of money. Any suggestions? I am about 1 hour north of Philly.

I would like to use the heloc to purchase (like cash). But to buy multi units i think i will need about 300K. So financing or a partner woulf be neccesary. Or maybe i just look in the below 100 price range like the last one.

I am just not sure if its worth trying to get financing/mortgage/partner just to get into MU RE.


Thanks in advance

Comments(5)

  • oscar19111st December, 2004

    Hello

    I invest in the Philly area. Just use the Heloc like cash and buy cash and then refinance the property to cash out and do the same thing again.

  • larbin1st December, 2004

    When figuring out if i can afford the loan, won't the bank take into account that i have a heloc open? this may not be a problem right away but after a few houses, it may be a problem. what do you think? debt to income ratio would change very quickly.

  • larbin1st December, 2004

    are there any re investor clubs in the philly area that you would recommend?

  • Young_Inno_Vative4th December, 2004

    check the laws in philly but if you have a friend that can split things 50/50 with...and you see eye to eye...start a limited partnership...
    your goals should be the same and you should have the same outlook on things or it wouldnt be a good idea to have an equal say in investment properties
    LLC's can be great tax shelters too so do a little research on it and see what you come up with
    i cant stress enough, just make sure the two of you see EYE TO EYE...
    good luck
    ~Andrew

  • rnordquest7th December, 2004

    As far as multi goes, I'm going to treat the SFR's I buy next year as multi. They'll all be similar in price, cash flow, etc. And contrary to a true multi I'll be able to offer the same product in a variety of locations.

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