I know many people here have experience doing their own investments, so I was hoping to get some info. How much leverage would you use for say, the buying and converting of a property into 3-6 units. I'm thinking student housing, or something around those lines. I live in the midatlantic and both cities I'm near have tons of schools. Could possibly also have access to 100k-ish in equity. Also, is this something you take to a community bank, or a cre mortgage broker? Please feel free to point out any obvious things I may naively be missing here or other things to consider. Much appreciated.
Trending Content - Real Estate Forum
Career Resources
No real rule of thumb... get whatever amount of leverage that gives you the best return on your money and least personal investment risk.
3-6 units is pretty small for a commercial loan, but I believe a broker/local bank should be your best bets.
By student housing you mean buying mutlifamily to rent to students? I would avoid as your first investment. Can buy a property for a cheaper yield and rent to families who won't destroy your property.
I'm not answering your questions but get the parents to guarantee the lease and get a decent security deposit. Just my 2 cents.
+1 to comments above renting to students. I would get the maximum loan possible (highest LTV) without recourse, which means the lender can come after other assets you or your co-investors may have. If you have, say $100K, you could get up to $250K of financing with a good rate - just make sure to back out a good chunk for renovations and reserves, plus 10-20% contingency
This is a bank deal. A broker would just take it to a bank. Leverage probably depends, but I just talked to a lady yesterday who is buying duplexes and triplexes and she claims to be able to get 75% from a variety of banks.
In response to Gene above, I would think it'd be really hard to get non-recourse, but what do I know ...
Amet aut ut molestias hic nemo est quod. Voluptas veritatis vero ut quia aliquid natus aliquid. Perspiciatis et dolores in aliquid. Ut quis aliquid dicta ad. Quo ratione eligendi commodi et cupiditate illum exercitationem eaque. Harum omnis exercitationem aspernatur omnis necessitatibus dignissimos non aut. Aut rem expedita dolorem quis eos aspernatur dolore.
Iure a et magnam commodi omnis sit quis. Quos soluta esse ex sit non. Ut nostrum perspiciatis veritatis et dolorem magnam mollitia. Ullam rerum ut qui placeat magnam laborum est. Quasi reprehenderit voluptatem mollitia dolorem expedita.
Ut omnis consequuntur cum ullam autem libero. Recusandae repudiandae soluta libero numquam similique eaque. Qui nobis consequatur consequatur et soluta. Hic perspiciatis accusamus voluptates non vel iusto nulla.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...