Multi-family residential financing is one of those topics that gets people interested in real estate investing. Usually, we find that people have more questions than they originally planned on having surrounding how they can obtain a multi-family property, what tax breaks accompany their new-found business and how to successfully create a sustainable business.
The excitement that accompanies a new business venture like multi-family investing is amazing. From a huge increase in your revenue to having much more control over the property than you would have if you owned a different type of real estate, chances are you’re eager to get this thing started.
Slow down for just a moment and take each of these 5 tips into consideration before becoming a multi-family home investor.
Take a Look at Everything Very Carefully
In the business world sometimes you’ll come across people that won’t be 100 percent honest with you. Do your due diligence as a property owner and make sure you dot all your i’s and cross the t’s.
You know what I mean right?
Don’t ignore signs that you may need to replace a furnace, plumbing, fire detectors or any other equipment in your building. Not to mention the fact that you’re required by law to ensure everything is working properly. It’s better to take the honest, responsible route to ensure your tenants remain pleased so that your business can expand even further.
Just hop on Google and grab a checklist to see what needs to be checked out and taken care of. Having a good maintenance man on hand will help with any last-minute issues you might need to fix.
Financial Advisors and an Excellent Broker
As with any business endeavor, real estate and multi-family building investments are no different. Finding the perfect broker and a financial advisor to help you make the best decisions possible is key!
By doing your research, looking at testimonials and asking the difficult questions you’ll be on your way to hiring someone who will take your multi-family investment property to the next level. In a perfect world, the broker you’re looking for has a huge network of amazing connections to help you finance your property.
The financial advisor you choose will be like a pocket tool ready to give you the best advice in your situations so that you’re off to a lucrative start. Now let’s get into the most important part…
Obtain All Documentation
Having all the correct documentation for your multi-family investment property is of extreme importance. Here’s a quick list of the documents you’ll need:
- Loan financing (original loan date information, type of loan, terms etc…)
- Current market value for the property
- Annual NOI (Net Operating Income)
- Real Estate Resume (think of this as your portfolio)
- Personal Financial Statement
Avoid Taking Short Cuts
This tip goes hand in hand with one of the ones mentioned above. This time we’re talking about not taking short cuts when hiring, networking, obtaining paperwork and managing your property altogether.
Vet every tenant appropriately and do your research on multi-family financing. This way you won’t be duped or tricked should you run into people who aren’t showing you the best options available.
Finding your dream property takes time, consideration and diligence. Yes, you’re eager to get this investment property off the ground running but take your time through every step of the process to guarantee that everything will run smoothly.
Try it Out Yourself
This one may seem a little off, but seriously. What better way to know what your tenants are going to feel and desire than trying out the apartment (or property) for yourself. You can assess any damages, find out what may need to be changed in the future and feel confident in reassuring your future tenants that your new multi-family real estate property is an excellent choice as a long-term living arrangement.
For all questions, concerns or to get started with residential investing contact us so we can get your real estate goals accomplished!
Keith McLaurin | Licensed Commercial Broker ID#01190109 / NMLS#1209195