Why it is multi-family and how to choose it

# Initiated weekPost 6: Multi-Family -

My favorite type of deals is multi-family. We buy buildings that are 20-100 units and currently on contract of compound with 192 units.

We're always looking for the right deal and when we get the right deal we're definitely buying.

Multi-family is a very good investment but managing such a construction is another scenario altogether.

Why?

When we started buying multi-family, we quickly realized that we were buying a building, but also a community.

Yes, in one moment you have dozens of customers (or will have you as soon as the building is occupied). And our goal is to bring quality tenants at a maximum price that will stay as long as possible for our customers.

So what we do:

First we manage the binoculars with a partner, never let an outside company manage alone.

We have a manager who is responsible for the payments.

There is a listing agent who is responsible for marketing the units and handling the replacement.

And maintenance guy who lives in the compound and is responsible for all repairs.

In one of our buildings Dave worked as a handyman who did a lot of work for us.

He has moved into the building (for a fee), is responsible for all the repairs, the tenants have his phone and he works for them.

Second, we treat the Dirks in a slightly different way.

Every tenant receives a receipt letter that he has entered the unit.

Once a month we make sure that they get a discount coupon for a store or grocery store in the neighborhood.

During the holidays we organize a meeting for all the residents and buy them a small gift.

And something nice that we use Boa - those who pay up to 5 a month get a discount of 10 dollars in rent - and it works well!

Yes, this is a community and we want satisfied customers, some to stay with us, some to bring their friends to live in our buildings, ones to keep the units and feel at home.

Why do our investors like to invest with us in Multi Family?
First it is very easy to calculate the current yield, and very quickly understand the improvement element. how?
- Examining who the tenants are?
- Are the prices currently paid below market prices?
- Is it worth it or worth it to renovate units and increase the rent?
- In what trouble is the owner in and how much is he pressured to sell?

If there is no element of improvement we do not enter into a deal.

In addition, the yield (rent) is divided equally among the partners.
So it does not matter if there are 80 percent or 85 occupancy percentages that will change our yield in the permil. This is in contrast to an investment in a home for rent, if a tenant stops paying and must enter the process of clearing the yield of that year drops to zero.

A multi-family deal will arise and fall over management! I think that I have come across so many stories of landlords who have become embroiled in mismanagement.

In our company in the part responsible for multi-family transactions we joined Jason the American partner, as I have already said he owns a management company that deals exclusively with multi-family.
Together we built an excellent management system. We buy fortified buildings that increase and increase their value.
And there is no more fun than that. Seeing a property that was almost non-tenant, neglected, becomes a bustling life.

In the photo of our compound at Palmer Park 24, the units are located opposite the beautiful park.

Tenants pay $ 800 per month and pay utilities (high price compared to the area).

We have a waiting list of tenants who want to enter and every apartment that vacates is leased immediately.

We bought the building last July in 700K, it was populated with 50%.

We renovated the units and quickly hired, we received an appraiser's assessment a month ago on 1.1 from.

(In pictures - the building in Palmer Park 24 units Town Houses after the improvement)

Yes, Multi Family!

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