Learn to Buy Small Multi-Family Properties at Charlotte REIA on February 2, 2017Posted on January 31, 2017 by
6:30 PM at the Rain Tree Country Club,
8600 Raintree Ln, Charlotte, NC 28270
Guests Pay $15 Online or $20 at the Door. RSVP Now!
The natural tendency for any new investor is to start small and work their way into the business. This works in some cases, but eventually they will want to move towards bigger deals with higher returns. One of the areas where investors can look for bigger returns is with multifamily properties. The greater the number of units, the higher chance they can reduce their vacancy factor and generate more cash flow. Just by adding only one or two more units scares off many investors and leaves them panicked. However, investing in multifamily properties can be very profitable and a lot easier than you think.
Kenny Roundtree has 25 yr’s experience in investing. He currently owns several houses and small apartment buildings. Kenny enjoys helping and putting together multifamily projects for investors. He is the owner of Edwards & Chase Affordable Housing Specialists since 2009. Kenny’s Objective has been to improve and uplift “struggling” neighborhoods in the Greensboro area. He set a goal to Secured a 10 unit project at budget which generated a 25% annual cash on cash return and achieved it. Then went on to Completing two 5 unit apartment buildings that that have generated a 20% total return. He currently, Maintains a 95% occupancy rate versus the average of 85% for the city of Greensboro. Kenny has also been Board member of Triad REIA.
Kenny believes that for every investor that focuses on single family properties, there are others that exclusively entertain multi family properties. Instead of closing ten individual single family transactions, they can get to their ten units in as little as just one deal. Even if they close two four-family properties, they can scale more quickly. This comes at a higher cost per property, but there is something to be said in closing only a few deals a year rather than trying to close multiple deals to get to the same point. It is also easier to manage two physical locations rather than scrambling around managing ten. If you can get the same number of rent checks coming in, but only have to focus on a handful of properties, it is more appealing. Is it starting to make sense why the single family vs multi family argument is still continuing to this day? It’s clear they both offer significant advantages to the investors who choose to take them on.
Having multiple units also increases your chances at collecting rent every month. If you have one single family property and the tenant stops paying, you have no other source of income for that property. On multi-unit properties, you have multiple tenants that will theoretically pay you rent every month. One tenant that stops paying on a ten unit property will not send you into delinquency. It is less expensive to own a multi-unit property than most people think. Even though you have additional units, you still only have one roof, one yard, one driveway and one basement.
There is also much greater upside potential on a commercial property than with any single family one. When you decide to sell a single family house, you are largely at the mercy of the market and the comparable sales around you. If the area is depressed, you can have the nicest home on the block but your comparables will dictate a lower sales price. With commercial properties, you can offset a shift in the market by using market rents as a way to calculate value. If rents are strong, they will be the most important factor that buyers look at.
This month Kenny will share with you how he Evaluates a 6 Unit. We’ll cover how to Determine rehab costs, securing contractors, and Acquisitions.
This month at the Charlotte REIA Main Meeting on Thursday, February 2nd at 6:30PM, Kenny Roundtree will share with you how he Evaluates a 6 Unit. We’ll cover how to Determine rehab costs, securing contractors, and Acquisitions. The meeting will take place at the Rain Tree Country Club which is located at 8600 Raintree Ln in Charlotte, NC.
As always, Charlotte REIA Members can attend the event at no charge and Non-Members can Register Online for $15 or pay $20 at the door. Be sure to bring your business cards with you and join us for an evening of real estate deals, vendors, networking, education and fun! See you there!