Secrets of Analyzing Multi-Family Properties

Learn the secrets of analyzing multi-family properties in San Jose.

This class is Module 39 of 46 in a series called Real Estate Investing Secrets.

Topics covered in this module include:

• The differences between analyzing a multi-family property with commercial financing and a single-family home with more traditional financing
• Obviously, the numbers are larger when you’re analyzing multi-family property deals, but what about the nuance of the increases
• How to deal with the listing and getting info on analyzing these types of deals
• The difference between actual and pro-forma numbers
• Why you might not be able to see all the units prior to making your offer and how it typically works with larger multi-family properties
• Why and how to make adjustments to numbers provided to you
• Determining the value of the property (ARV) and understanding the difference between these multi-family properties and smaller properties
• Negotiating with multi-family sellers and their agents/brokers
• How is financing different for 5+ units compared to financing < 5 units
• What lenders typically look for when financing 5+ unit commercial loans
• Down payments on 5+ unit commercial loans
• Debt Service Coverage Ratios… how to calculate it and how it is used when analyzing multi-family properties
• How amortization/loan term changes with multi-family financing
• How interest rates differ from more traditional financing
• The ugly truth about pre-payment penalties with 5+ unit commercial financing
• Can lenders really insist on reviewing your financials every year when getting commercial financing
• How closing costs change when analyzing multi-family properties
• Analyzing properties where you are improving their economics… and how to represent that with rent ready costs
• Why you’re much less likely to have to use cumulative negative cash flow when analyzing multi-family properties… and it is NOT because the properties cash flow better
• Modeling monthly rents and monthly other income—especially if you’re improving rents—when analyzing multi-family properties
• Correctly analyzing vacancy rates for multi-family deal analysis
• Why you can’t just use the property taxes in the listing when analyzing these deals
• Why you should call your insurance agent instead of using the seller’s insurance costs during deal analysis
• Dealing with landlord-paid utilities on multi-family properties including modeling switching to billback for utilities
• What common expenses might you see when analyzing multi-family properties
• Dealing with maintenance and capital expenses during multi-family deal analysis
• A word on liquidity challenges with multi-family
• Multi-family pros and cons
• Plus much more...

Check out the video and additional resources related to Secrets of Analyzing Multi-Family Properties.

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