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TOPIC: Re: New to Multi-Family Properties
#4553
T-Arkarai ()
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New to Multi-Family Properties 5 Years, 1 Month ago Karma: 0  
I am looking into purchasing an apartment complex. I have seen advertisements for up to 100% financing. I have also been told that the financing is _base_d more on the profitability of the property than the credit worthiness of the buyer. Is this true? I plan to manage the property myself since I have a background in property management. I need some advice on how to go about structuring a deal, and more importantly, how to know what things need to be done before making an offer so that I am not purchasing an alligator property. If you have any information you can give me or any place to refer me, I would greatly appreciate it.
Thank you in advance for your help.

Tia
 
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#4554
David ()
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Re: New to Multi-Family Properties 4 Years, 10 Months ago Karma: 0  
The loan that you get will be _base_d on the net operating income.  You take that amount and divide by 10 and that will tell you how much the property is worth.  Is the property owned by an LLC?
 
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#5667
RBenm ()
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Re: New to Multi-Family Properties 4 Years, 1 Month ago Karma: 0  
Why would you divide that amount by 10? First of all what amount are you talking about and that amount which is the net operating income (NOI) should be divided into the purchase price to get you your cap rate. Then whatever your cap rate is, you divide your cap rate into your NOI to get the property worth. But, before the NOI and cap rate, a cash analysis is required. The loan should be _base_ on your NOI.
 
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#5670
adminchat ()
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Re: New to Multi-Family Properties 4 Years, 1 Month ago Karma: 2  
I too am confused about the "10". However, I think Tia, that the value of the property is _base_d on the property income, not the financing. Its an appraisal method called the "Income Approach" and in general terms the higher the rents the more the property will appraise for.
Commercial loans will take into account the profitability of the property, among other things.
 
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#5828
billy ()
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Re: New to Multi-Family Properties 3 Years, 11 Months ago Karma: 0  
have property that has 500,000 of work need but the property is valued at 2,000,000 what should i do
 
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#6903
billy ()
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Re: New to Multi-Family Properties 4 Months, 2 Weeks ago Karma: 0  
I dont know how old this thread is, however, you should obtain Carlton Sheets course or coaching program before you go any further. In order to invest, the questions you are asking you should already know before investing or you may end up with a lot of issues.
 
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