Multi Family Investment Property
The numbers you see advertised for multi family investment property look awesome.
But when you see the expenses the profits quickly vanish!
There is a reason you will never see that profit loss statement from a multi family investment property seller.
There was NO profit!
Note: For a general introduction to Real Estate Investment, be sure to visit the Real Estate Investment Start Page.
This video shows just one typical weekly encounter with a multi family investment property resident:
Why you don’t want to purchase this type of property as a Real Estate investment:
- Older & require more maintenance.
- Most licensed trades can’t work on them.
- Many tenants are desperate and / or have substance abuse issues.
- Most are in dangerous neighborhoods.
- There are very few property management companies willing to manage these.
Unrealistic Income Expectations of Multi Family Property Investors
The number one problem we face with new owners of these properties is unrealistic income expectations. It usually starts with their agent who blew smoke up their butt and told them they would make a zillion dollars. If you have unrealistic expectations, you will fire us about 3 months from now so we prefer not to suffer with you. It takes us about $200 per door (unit) to start managing a multi family property as they are major work to get up and running properly.
- The speed at which units get rented is a function of price.
- If you are just $100 over market on the rent price, your unit will never get rented. Ever.
- Zombie attacks will cost you huge while you are waiting for that tenant to pay over market.
We will not manage your property if your income expectations are unrealistic. You will need to learn that lesson with someone else.
For more on Real Estate investment visit the Real Estate Investment Start Page.
Managing multi family property requires a lot of courage and experience.
These are not for amateurs. Be sure to visit the Investor Mistakes page.
Here are some videos of Jim Eagan dealing with multi family properties:
Abandoned Multi Family Property Unit
This property was managed by a company who had no business managing a multi family property.
Self Managed Multi Family Property
This is what usually happens when owners try to manage multi family properties themselves.
Just Another Day at a Multi Family Property
This moped thief kept jacking up the price and lowering the profit of the multi familyproperty.
Unless you see yourself handling these types of situations, you need to stay away from managing a multi family property yourself.
Managing multi family properties requires a tremendous amount of skill.
If you just purchased a this type of property, you are in for the ride of your life. If you have already owned a this type of property and your current property management company drove it into the ground, the worst is not over.
Multi Family Investment Property Q & A
Why have you encouraged all your investors to unload their multi family property portfolio?
Why have you encouraged all your investors to unload their multi family property portfolio?
We have been managing multi family properties for the last 12 years and the results have been disappointing. They looked good on paper when we purchased them but the reality is that these buildings are old and prone to major repairs involving plumbing, electrical and air conditioning. All those numbers you see advertised are called “performa”, but are not real. Our very best property performed at 10%. Most performed at 4% when our investors purchased them in the last recession. You will be lucky to break even in today’s market (April 2022).
Is there a way to figure out whether a multi family property will have major repairs in the future?
Is there a way to figure out whether a multi family property will have major repairs in the future?
No. No amount inspections or reports will determine when a this type of property will have a catastrophic flood or catch fire. Two of our buildings caught fire because of tenants or transients. These tenants also have a tendency to completely destroy air conditioners or bathrooms. These properties are also located in rough neighborhoods and vandalism is constant.
Are there any newer multi family property buildings?
Are there any newer multi family property buildings?
There are just a handful that are built after 1980. These handful are located in HOAs that have really stiff monthly fees. Once you dig into those, the numbers don’t work. If you can find one, be absolutely certain to confirm the HOA dues.
Are there any multi family properties in A, B or C neighborhoods?
Are there any multi family properties in A, B or C neighborhoods?
No. On a scale from A-F, the best you can do is get a property in a D neighborhood. The majority of these were built from 1950 – 1970 close to the Strip or Fremont. The older multi family property neighborhoods are pretty rough.
Is it practical to purchase a multi family property with an FHA or VA loan?
Is it practical to purchase a multi family property with an FHA or VA loan?
Not really. The only successful case we have is where a young single guy with big balls followed our advice and really did his homework on managing properties. Once a pissed off tenant starts pounding on the door at midnight, the wife busts a move. We have no example of a couple who managed to survive more than a few months.
Why have you decided to stop managing multi family properties?
Why have you decided to stop managing multi family properties?
At our peak, we managed about 30 multi family investment property buildings. They constituted 90% of our repairs, rehabs and evictions. The brain damage to our maintenance staff, agents and brokers was extensive. The majority of these tenants have substance abuse issues or have a bolt missing. They also represented ALL of our lawsuits. We are currently battling a tenant who sued us for $4k for throwing away his roach infested couch. The $50 per door we have been charging owners simply isn’t worth it.
Do you know of anyone who can manage my multi family property?
Do you know of anyone who can manage my multi investment property?
Yes. However, not to brag or anything, we simply don’t know anyone better than us at managing these. The reason we managed so many of these is because we were referred by other companies who simply gave up and cried “Uncle.” We have taken completely vacant properties to fully occupied properties because we have lots of experience. See our YELP reviews.
Is it easy to evict a multi family property tenant?
Is it easy to evict a multi family property tenant?
Not anymore. The liberals have descended upon us and now it takes 60-120 days to toss naughty tenants.
Where do 95% of your lawsuits and evictions come from?
Where do 95% of your lawsuits and evictions come from?
You know the answer. Multi family property. Since we stopped managing multi family investment property, the number of lawsuits dropped from 6 a month to 6 a year.