Have a few successful single family flips under your belt? Considering making the jump to a multi-family investment? With bigger risk comes the potential for a bigger reward but, like anything else, it pays to do your homework. Analyze the deal carefully before you take the leap!
Here are a few things to keep in mind:
Location, Location, Location
When it comes to real estate—big and small—there is nothing more important than location. That makes sense, doesn’t it? After all, location is one of the only things about the property that can’t be changed. Renovations can greatly impact the overall value of the property whether it means adding state of the art appliances or luxury finishes or even tweaking the unit’s floorplan. But, for obvious reasons, it is impossible to pick up and move the building. Location is a given so consider it carefully.
Valuation Is Key
Unlike a typical single family fix and flip, valuing a multi-family property is a whole different ball game. Rather than looking at overall square footage, multi-family properties are valued by the rental income they are projected to generate net of any expenses. You will need to take a close look at the unit composition of the building as well as typical vacancy rates in the area to determine expected rental revenue. We also advise planning for a rainy day and having cash reserves on hand to cover unforeseen repairs or a higher than expected vacancy rate.
Choose Financing Wisely
If the numbers seem to be adding up in your favor, your next step should be to find a lender who will have your back. Piggybacking on our successful Single-Family loan program, we are now providing funding for multi-family properties with 5+ units and an estimated loan amount between $100K and $5M. With competitive rates and rapid approvals, this Multi-Family loan program will allow Navigator Private Capital to guide you through what can be a complicated process. Our innovative, customer-centered loan programs are designed to move your next project forward—on schedule and within budget.
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