You are painting a picture of the forest and not a bunch of trees. I am getting mentoring from a large national level mentor. Your thoughts presented here is one giant beacon of light, I am going to memorize these pros and cons!
Thanks Nancy! I really appreciate your kind words, you saw what we were trying to say here. Glad you enjoyed! Please check out our website as we do offer mentorship programs!
Great video as always Matt! Once you told me that when calculating expenses for you go with 10% management, 5% vacancy, 5% repairs. What about cap ex? Is that included in the 5% repairs or how do you do it? Thank you
No, for Mid Sized multi you should set aside between $250 to $300 per unit per year for Cap Ex. For small Multi you need to look at the building to figure what costs you will need to save for - roof condition, furnace, windows, unit upgrades, etc... then calculate how much per year you will need to save to build enough coffers to address these issues when the time comes.
Great content. How would I go about being able to see what's on the market for sale? Do I find a commercial REA or is there a better way to see them other than loopnet... Thanks again.
Matt - fellow Hokie here. How large of an operating expense or debt service reserve do your recommend on small multifamily purchase (20 unit)? Is there a % of NOI rule of thumb that you use?
Hey Tyler! Go Hokies! 2017 is our year, I feel it! For that sized deal I would set aside either 6 months debt service or 50% of one year's expenses, whichever is greater. Use that as a kick start to your Cap Ex reserve and also some cash to dip into as you stabilize the property in the first few months.
I would love if you did a video on financing for 5 to 15 unit apartments and arriving at their values. I Feel like that space is less sophisticated so some people understand NOI and cap rates and other people try to look at comps
Great idea! 5 to 15 units are interesting - too small for cap rate evaluations. If you have a deal email it to helpme@derosagroup.com, I'll evaluate it for you
Love your vids very easy to learn from. I was wondering for rookies like myself could you do a video on smartest ways to tip find good realtors, lawyers, and property manage companies to start your real estate business. I watched your other vids and layout really well what you need to get started but how do you find and how do you know who you should roll with. I have talked many of each and I'm nervous who I should pic what is criteria percentages, fees, track record. How did you find yours I guess is a lot better way to ask sorry lol. Thanks have a great day.
Great Video! It's nice to see some cons of multi-family, sometimes people who post videos about multi-family only talk about the positives and you get a feeling that multi-family is like a 'holy grail' investment. By that I mean it's the best thing you can do. As you may remember, I am currently a college student looking to buy Multi-family after school (and once I obtain enough capital). I am worried about the popularity of multi-family because I feel like this is going to make it exponentially harder for me to enter into this game. What are your thoughts about the general multi-family market looking into the future? Do you think multi-family is maybe in a bubble, and the next recession (which many have speculated is soon) will shake a lot of weaker hands out of multi-family? In other words, what do you think the effect of the next recession will be on the multi-family marketplace?
Nick it's really hard to say what the upcoming market is going to do. I don't see the current cap rates as sustainable, so I do see a pull back happening. that being said, if owners can't get their price and their assets are stable, they just won't sell. my advise to you would be to keep learning and saving. when you are ready to get in, invest for opportunities that are evident in the market at that time. don't try too hard to predict the future, because no one gets that exactly right lol.
Would be helpful to find out how to actually find these buildings. I know loop net is worthless unless you buy a property with high vacancy rate How to find these properties? Cant necessarily talk to CRE broker because they will only show you deals their current clients dont want to purchase.
KidCity Lynnwood Thanks for watching and commenting! If you have any real estate related questions please feel free to email them to HelpMe@DeRosaGroup.com
"Mr. Math". LOL, thanks. That's a loaded question. It's all about the collateral. If you get a loan on a real estate purchase, that has the real estate as collateral via a mortgage, in your own personal name, and you plan to live there, and it's 4 units or less, then yes the down payment can be cheaper. They call that a "house hack" on Bigger Pockets. If you are doing a strait purchase for investment purposes only, then no there is no difference.
Derosa Group ah ok thank you! What is in your opinion the most wanted rental property for tenants? Something like a single family home? Or perhaps bigger rental properties? I am researching real estate so I can buy my first rental property next year :)
@@DeRosaGroup I was joking because you specifically said dont leave a comment and say that @ :40 lol. You have some great videos on what to expect with rentals ive been learning quite a bit. My situation is that a close relative has about 250k to invest and was considering buying a home to rent. I've been trying to explain that is not a good investment because the ROI is much smaller then to get a loan and purchase multiple homes. She has been making about 5% yearly ROI and I would love to help her make over 10% net....is that realistic in todays market which seems to be on fire still?
I wouldn't promise 10 percent... 5 is not that bad these days but it may not have collateral. Maybe you borrow it at 8 percent with a monthly payment? That's good cash flow for her and a solid line of credit for you. And thanks I forgot about the 40 unit comment I made lol!!
This guy isn't talking text book, he's talking as an actual owner. Gotta subscribe to this guy.
You are painting a picture of the forest and not a bunch of trees. I am getting mentoring from a large national level mentor. Your thoughts presented here is one giant beacon of light, I am going to memorize these pros and cons!
Thanks Nancy! I really appreciate your kind words, you saw what we were trying to say here. Glad you enjoyed! Please check out our website as we do offer mentorship programs!
I'm learning so much from you Matt. You're adding real value out here, please keep it going!
Great video as always Matt! Once you told me that when calculating expenses for you go with 10% management, 5% vacancy, 5% repairs. What about cap ex? Is that included in the 5% repairs or how do you do it? Thank you
No, for Mid Sized multi you should set aside between $250 to $300 per unit per year for Cap Ex. For small Multi you need to look at the building to figure what costs you will need to save for - roof condition, furnace, windows, unit upgrades, etc... then calculate how much per year you will need to save to build enough coffers to address these issues when the time comes.
Awesome seeing the numbers with explanations. Do more please. Four plexes and higher for me!!
Great content. How would I go about being able to see what's on the market for sale? Do I find a commercial REA or is there a better way to see them other than loopnet... Thanks again.
Matt - fellow Hokie here. How large of an operating expense or debt service reserve do your recommend on small multifamily purchase (20 unit)? Is there a % of NOI rule of thumb that you use?
Hey Tyler! Go Hokies! 2017 is our year, I feel it!
For that sized deal I would set aside either 6 months debt service or 50% of one year's expenses, whichever is greater. Use that as a kick start to your Cap Ex reserve and also some cash to dip into as you stabilize the property in the first few months.
I would love if you did a video on financing for 5 to 15 unit apartments and arriving at their values.
I Feel like that space is less sophisticated so some people understand NOI and cap rates and other people try to look at comps
Great idea! 5 to 15 units are interesting - too small for cap rate evaluations. If you have a deal email it to helpme@derosagroup.com, I'll evaluate it for you
Your audio sounds MUCH better in this video!
Nate Socrates thanks for the feedback!
Really thankful for each of these videos!
Dave Vs Life we are grateful for you also!!
Love your vids very easy to learn from. I was wondering for rookies like myself could you do a video on smartest ways to tip find good realtors, lawyers, and property manage companies to start your real estate business. I watched your other vids and layout really well what you need to get started but how do you find and how do you know who you should roll with. I have talked many of each and I'm nervous who I should pic what is criteria percentages, fees, track record. How did you find yours I guess is a lot better way to ask sorry lol. Thanks have a great day.
Great stuff! Thanks for this awesome video.
Great Video! It's nice to see some cons of multi-family, sometimes people who post videos about multi-family only talk about the positives and you get a feeling that multi-family is like a 'holy grail' investment. By that I mean it's the best thing you can do. As you may remember, I am currently a college student looking to buy Multi-family after school (and once I obtain enough capital). I am worried about the popularity of multi-family because I feel like this is going to make it exponentially harder for me to enter into this game. What are your thoughts about the general multi-family market looking into the future? Do you think multi-family is maybe in a bubble, and the next recession (which many have speculated is soon) will shake a lot of weaker hands out of multi-family? In other words, what do you think the effect of the next recession will be on the multi-family marketplace?
Nick it's really hard to say what the upcoming market is going to do. I don't see the current cap rates as sustainable, so I do see a pull back happening. that being said, if owners can't get their price and their assets are stable, they just won't sell. my advise to you would be to keep learning and saving. when you are ready to get in, invest for opportunities that are evident in the market at that time. don't try too hard to predict the future, because no one gets that exactly right lol.
ahhh okay, that makes sense. I'll keep that in mind!
Would be helpful to find out how to actually find these buildings. I know loop net is worthless unless you buy a property with high vacancy rate
How to find these properties? Cant necessarily talk to CRE broker because they will only show you deals their current clients dont want to purchase.
Love your vids. A lot of the videos are guys that want your money this guy actually has good info
This guys legit subscribing now
Thank you!! Consider joining our Insiders group too! Www.derosagroup.com/insiders
Great video, thank you so much!
KidCity Lynnwood Thanks for watching and commenting! If you have any real estate related questions please feel free to email them to HelpMe@DeRosaGroup.com
*Fantastic job! Mr Math! Question: if you get a loan as a business , is the down payment higher than if you get a personal loan? Thanks!*
"Mr. Math". LOL, thanks. That's a loaded question. It's all about the collateral. If you get a loan on a real estate purchase, that has the real estate as collateral via a mortgage, in your own personal name, and you plan to live there, and it's 4 units or less, then yes the down payment can be cheaper. They call that a "house hack" on Bigger Pockets. If you are doing a strait purchase for investment purposes only, then no there is no difference.
Could you tell me what you mean by unit? Does one unit equal 1 room for renting?
No, one unit equals one apartment. One living unit
Derosa Group ah ok thank you! What is in your opinion the most wanted rental property for tenants? Something like a single family home? Or perhaps bigger rental properties? I am researching real estate so I can buy my first rental property next year :)
Everyone wants something different, so it's hard to say lol. Some tenants want single family homes, others want an apartment . Best of luck!
What do you define as a unit? Does a 20 unit multifamily mean 20 apartments?
You got it!
How does one monitor rent trends in a particular area?
domyank95 we use Craig's list!
Oh okay I see. Thank you!
Hey man I think small multi family's up to 40 units.
Good point. It's not a hard and fast line, but many draw it between 30 and 80 units and below is considered small multi.
@@DeRosaGroup I was joking because you specifically said dont leave a comment and say that @ :40 lol. You have some great videos on what to expect with rentals ive been learning quite a bit. My situation is that a close relative has about 250k to invest and was considering buying a home to rent. I've been trying to explain that is not a good investment because the ROI is much smaller then to get a loan and purchase multiple homes. She has been making about 5% yearly ROI and I would love to help her make over 10% net....is that realistic in todays market which seems to be on fire still?
I wouldn't promise 10 percent... 5 is not that bad these days but it may not have collateral. Maybe you borrow it at 8 percent with a monthly payment? That's good cash flow for her and a solid line of credit for you. And thanks I forgot about the 40 unit comment I made lol!!
Wish you were on the west coast!
Great stuff Matt!
Joe Fairless - Best Real Estate Investing Advice Ever Show you da man, Joe! let's catch up soon!
Thanks for sharing!
Thank you so much
Thank sir
you are the greatest wish i could meet you thanks
Good video. Thanks!