Multi Family VS Single Family

# Initiated weekPost # 4

The difference between Single Family and Multi Family
In single sentence Single Family is a private property Multi Family is a commercial property.
Now we'll take it a step back,

Multi-family is a building or group of buildings that can be purchased only as a unit.
Just as you can not buy a room in an apartment, it is impossible to sell a single apartment in a multi-family.
It is all one unit for the purchase of an investor or group of investors together but as one entity.

Single family, it's just a private detached house.

From our point of view as investors, the difference between a private property and a commercial property is how the bank examines them and is prepared to give them a loan.

A private property will be valued according to similar properties sold in its vicinity. This is what the appraiser does, assesses the value of the property in relation to the environment.

Commercial property, valued as a business for all intents and purposes.

It does not interest the bank in how much are sold similar properties (or interesting but much less) and what is interesting, this is how much money the property knows to produce.
From his income cycle, how much profit remains to the owner, accordingly it makes calculations and gives money against the property.
Why does it interest us?

Because we are in the hat of investors.
An experienced investor, leverages with the bank to maximize profits (those who have not read post 3 I suggest reading to understand more this point)
Commercial property, we will have in fact capital of only 30%, the remaining 70% (or more) bank will complete us.

And since the 70% that the bank buys us and we earn for every shekel we take from the bank, we will earn a penny or more 1 (the role of the entrepreneur is to ensure that the numbers work with sufficient profit margins in case of crisis or tenant departure)

In the end the real estate investor has one clear intention.
Meet with the money invested and as soon as possible.
After we return the equity, we will begin to make a profit.

Thus the rich become richer. Because they are just every time extracting their wealth and remaining with more assets.
As opposed to the sale of time that is limited and no recurring money is an unlimited and recurring resource.

In the next post I will talk about differences between purchasing areas. The difference between Class B and Class C (crime level)

Thanks for your time to read the posts, comments and reviews, I appreciate it very much!

Eyal.

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