How I Turned a DUPLEX into 20 Units!
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- Опубліковано 22 лип 2015
- In this video we talk about real estate investing and how we turned a duplex rental property into a 20 unit apartment complex. Learn more about us at www.DeRosaGroup.com or on Bigger Pockets at www.biggerpockets.com/users/mf...
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OMG you are my old landlord! Great Job Matt!!!
Thanks! Hope you are well!!
@@DeRosaGroup Yes, I am. Thank you, years ago I really needed a place and you gave me a chance. You have no clue how much that meant to me and my family.
My girlfriend and I own a 4 units, live in one of the unit. We are closing on the 4 units next in a few weeks.
Same vision, thank you for sharing.
Thanks! To get a big basket of goodies and bonuses PLUS a coupon to join our DeRosa Insiders program for $1 the first month, just text DEROSA to 66866. Go to www.derosagroup.com/insiders to learn more about Insiders.
there are a million ways to do real estate and here is a perfect example of one. buy up streets, buy up neighborhoods. I see alot of this in texas currently, where a owner sells multiple duplexes and fourplexes on one street. Its a great way to start. I think if you go owner occupied and move every year you could have low downpayment mortgages, but investors and lines of business credit is a faster route to get there. Thanks for sharing.
Thanks Erica! Its a great way to leverage your investment. It also allows you to control the quality of the block which will in turn raise tenant happiness and longevity!
There is another big advantage to "Residential" or Home Mortgages: Interest Rates are still historically low, and with a Residential Mortgage, one can get the Rates locked in for 15 - 30 Years. (If possible, it is better to pay off debt sooner). On the other hand, I am finding Commercial Loans might be amortized in 25 years, but they come due in 5 - 10 years. Which requires that the debt be either paid off or refinanced again after 5 or 10 years.
what is your Net Worth?
Ericka Williams 一
Ericka Williams it’s a great strategy.
You're awesome Matt! Thank you for all of your insights.
Thank you, this Vlog was exactly what I needed. I’m a little guy looking for my next property and this video taught me, reminded me, to be patient and that a good deal isn’t necessarily a big deal.
So glad you got that, it was the intention of the vid!
Loved your strategy and your detailed responses to all of the questions in the comment section. I’m subbing to your channel
Valuable content here. Thank you!
Very thoughtful advice, thanks for share your advice and experiences. Best of luck on your future endeavors.
Awesome Video, thanks for uploading this!!
Wow 😮 love your strategy, that video really lift me up today and my goals, I’m studying to get my real estate license in New York, but I live in Nj
I’m biggest is to be an Investor just like you, lol my gf and I are working to invert in the future. We are working on our credit now, we both an our 20’s.
Great job and I’ve been followed BiggerPockets for a few months now, “ wow” I learned so much from it. I just Subscribed to your channel and a 👍🏾
I really want to get into multi rentals to add to my single rentals.Thanks for Sharing!
Thank you. This was very informative.
Great video. Good luck with your real estate ventures.
Thanks for sharing and congratulations!
Great job Matt!!!! Keep it going man!!!! We are on a similar path!!!
Thanks! To get a big basket of goodies and bonuses PLUS a coupon to join our DeRosa Insiders program for $1 the first month, just text DEROSA to 66866. Go to www.derosagroup.com/insiders to learn more about Insiders.
can u talk more about what you looked for when initialy picking your first multifamily to start your portfolio.
thanks.
Key word: Vision. It's not going to happen by accident. Vision accompanied with action equals success.
Great portfolio build! We do that specifically but only with SFRs (Single Family Residence) in Austin, Texas. Keep it up!
Yes very helpful thank you. I did notice just calling around to different local banks they have different guidelines and qualifications for loans. However when it comes to home loans they all seem to stay true to the Fannie Ma guidelines. I will keep searching tho thanks.
Really liked the information in this video. Gave me a general idea of how acquiring 20 units can happen. I am 21 thinking of starting in the real estate business very soon.
How awesome! Thank you very much for this video!!
Thanks! To get a big basket of goodies and bonuses PLUS a coupon to join our DeRosa Insiders program for $1 the first month, just text DEROSA to 66866. Go to www.derosagroup.com/insiders to learn more about Insiders.
Hey Matt, been reading your and Liz's blogs on biggerpockets.
wannawatchu66 thanks!!
congratulations good information
Thanks and that camera rules!
Glad you enjoyed!!
Hi matt , you make a great point! My take on that is always keep your options open, which is a great way to look at things.
not sure about the 1030 as im in canada but im sure we have something similar, i'll look into it and get back to you on that as you may have others who maybe asking the same questions
Nice. That’s how I got started. Great video
Awesome insight.
Thank you so much for the info you rock!
Juan Cifuentes Thanks glad to hear you enjoyed the video and our channel! If you ever have any real estate related questions please email us at helpme@derosagroup.com :)
Love the story. Very motivating. Thank you
Thanks! Have you read Matt's Book Raising Private Capital yet? If not go to www.biggerpockets.com/privatemoneybook to pick it up and also get a bunch of bonuses including an Ebook on buying apartment buildings!
Awesome video. Thanks for sharing :)
thanks for watching!!
Which bank is good that you would recommend for a first deal in Philadelphia?
How much did you pay for the units? And how much are you selling...that's the most important info that we would like to know thx.
Excellent content thank you!
Thanks! Have you read Matt's Book Raising Private Capital yet? If not go to www.biggerpockets.com/privatemoneybook to pick it up and also get a bunch of bonuses including an Ebook on buying apartment buildings!
This is very inspiring. Thanks for sharing.
Thanks for commenting and watching! Glad it inspired you!! :)
Fantastic great idea
Love this video! I am looking to buy a duplex in the next year, and I'm getting married at the end of this year. Thankfully we both have good money habits - but we do have a fair amount of student loans. I want us to be in a much better financial place than our parents our in, and I know we have to start making good decisions now.
Idk if you're still checking this video - but did you ever live in one your units or did you own a separate property the entire time you managed them?
So glad to hear, Dave. We bought our first property (a duplex) when we were in our mid 20's - and just about to get married as well! Starting young is a great thing to do. Just keep studying and learning!!! Hope our videos on our channel are helpful. If you have a specific question you want want answered, please email us at helpme@derosagroup.com. Every Monday we answer questions from our subscribers about real estate investing!!! :)
I currently own a duplex in KY and would like to do what you've done. Did you leverage the duplex to buy the other duplex. When did you bring on other investors?
Im just getting into real-estate ..... whats the best way to attack wholesaling ?
where do you find a row of quadplexes? I can't even find one single decent deal
Thank You!
Congrats on the sale great strategy.
Thanks Kevin!
Have you bought another rental property sence then?
Absolutely. We are constantly buying. Check out the UA-cam channel to see more deals we did. most recently we bought a 49 unit, there is a recent video about it
so u started with the exchange and kept adding on from there.
great info
Thanks!
Grest info, thanks, im.looking for a 3-4 unit property now...any tips on the search?
Most of those deals are on the MLS so start there. Also try the REO auction sites like Hubzu, Xome, or Auction.com.
In order to do that you need a lot of cement, two x fours and shingles.
Or a 1031 exchange and a business plan
Great stuff! If you'd start over again with what you know today.... What would you have started to buy? Single family, duplex, 4 or 6-plex or bigger?
hey Chris - If I had to start over and it was today's market, I would do fix and flips in nice areas and use those proceeds to buy small multis and single families. If I didn't own my own home already I would buy a small multi and move into it. Once I did that for a year I would use that track record to enroll investors in larger multi projects.
10-31 Exchange....🤔🤔🤔 I'll look into that. Please share some of your leasing strategies. Thanks, in advance!
Good! Glad you liked it. There is a ton of info on leasing and 1031 on this channel!
I would like to know what I can do to be like you. I live in Texas and the housing market is big here with old homes.
I would definitely like to get into something like this
Very inspirational. I’ve been looking for 16 or more units but haven’t found “the one” yet. Would appreciate knowing more about multi family.
Hi ExplorerLink! Thank you so much for the support with our channel! I would reccomed the Biggerpockets bootcamp! It covers every stage of multi family acquisitions and what mistakes to avoid etc. Watch the intro video here and learn more. Keep in mind registration was extended and will close by tonight! get.biggerpockets.com/multifamily-fallbootcamp-fall22-derosa/
Good info. Great video. Do you know of any good information on raising money?
Thank you,
Jim
Jim Brooks I taught a course on how to raise private money out of your own network for a local REIA in Jersey. They are selling the recording of that course, you can find it at www.sjreia org
Love the story! Want to do the same for myself.
Great Info. I would like to know how bringing in and investor with you on these properties works? Do they have a % of the ownership in the buildings or do you just use their capital and pay them back their capital plus a % at some point?
Thanks in advance for the information!
Hey Curtis! They have a percent ownership of the building, which gives them a percent of the profits, appreciation, and equity build up through mortgage paydown. We pay out profits quarterly on cash flow. Here is an article and video I did on entity structure on Bigger Pockets not too long ago. You can find a lot of great information on deal syndication on Bigger Pockets, you should check it out
www.biggerpockets.com/renewsblog/tripled-portfolio-creative-entity-structuring/
@@DeRosaGroup hi I can't play the video?
Congrats on your success and selling! I would like to have a property manager manage the buildings when it comes time to do so. Any suggestions on doing that with 2-4 unit buildings?
Sure, you can find a pm that charges a flat rate for smaller multi
hey great video. I'm getting out of prison soon and have plans to start a real estate business with a great friend of mine who's getting out sooner than I. stories like yours really inspire me. thanks and keep that entrepreneur spirit alive. God bless
It’s been a year could you update us, are you ok ?
You had UA-cam in prison?
@@Chris-uo3rj that’s what I was thinking like wtf guys in prison are out here surfing the web and watching UA-cam
Investment in crypto and stock has become very profitable, and very good options in securing a better financial life that's where i belong and survive from.
I'm really interested in this form of real estate. It's just about the taxes that has gotten me all confused. Why 1031 exchange?
love the back story about this deal! so I want to get into real estate and I intend to buy my first multi family house that has 3-6 units. i will be occupying one of the units. I know nothing about what it's going to take to maintain and manage this building bcuz I have never done anything like it before and I don't know how to do any repairs. I want my tenants to be taken care of when problems arise so I'm considering hiring a property manager, but I want to do it myself bcuz 1) I'd be living there already 2) I want to gain experience and knowledge. Can anyone offer any advice or suggestions? thx matt n derosa group for another great video!
Hey Emmy - I would stay at 4 units or less because you can obtain better financing (low money down for owner occupants) at that size. Also manage it yourself. You will figure it out as you go. Use www.BiggerPockets.com as a resource if you aren't already! Good luck!
emmy tones multi units for your first is very risky. You should start with a single unit or even juat rent out a room in your home to get a feel for management. Youd also better know your local landlord / tenant laws. I think multi unit is nit a good idea for an inexperienced investor. Make mistakes on a smaller scale. Start small.
It would be nice if you could make a video on what a class A, B, C, D apartment complex properties are and what features go into them? What is Section 42 housing and the difference between Market and section 8 housing? Hotels are rated on a 5 or even a 7 star rating. Depending on the amenities are depends on the star rating. I have been told that a 5 star hotel has to have a minim or 2 restaurants and they have to have a pool & hot tub, 24/7 Valet & Room Service etc. Is there a minim square footage for each type of apartment complex and for example if one apartment complex had 2 or more elevators a Pool/Hot Tub, Fireplace in the living room and master bed in each unite, Back-Up Generator that could operate the entire apartment complex 24/7 on one tank of fuel for at least 7 day's straight vs a place that may have back up power but it may operate one or two lights in the haul and the elevator but not the apartments themselves. Can you explain the differences and maybe walk through different types of apartment complexes and show the condition and the different amenities are and the minims and the numbers on how they are classed?
I have always heard..buy, reno, rent, refinance, repeat. But no one clearly defines the refinance part of the equation. are you talking about a cash out refi to stockpile cash for the next one or just refi-ing to lower the interest rate of a hard money original loan?
Jesse Peters both, whatever makes sense.
If you are going to repeat the process, you'll most likely want to refi all or most of your cash out so you can put it into the next deal. As long as you keep pulling your money out, you won't run out.
Looks like thats close to where I lived for awhile in Delco PA 😊
Not doing videos any longer? Great stuff and thank you.
Doing tons of videos, hope you subscribe and check them out!!
Just subscribed!! Thank you
Great opinion. Easy to follow and understand. I wish I would have started earlier, but it’s never too late. Dont want to be the richest dad in the neighbor, but one that sets his children with funds to go to college and take them on yearly vacations.
Good work
Congratulations to you and your wife .
Thank you!!!
Hi! So my question is, is there a way to buy in Texas while living in New York. Because, Im living in Texas right now where there are very good deals but I might move to New York in few years for an important projetc...
Paracle7 of course, many people invest in states they don't live in. Your biggest task will be to find a solid local property manager you can rely on. Do that while you live there so you can inspect them locally.
You mentioned having to bring in other investors. Why? How? Tips on locating?
went to your website, it's all just options to buy books and hats. what happened to the free book?
another great video!
Thanks Barry, we appreciate it!!
Keep it up!
Omg irl monopoly I love it!
Yes!!
Hey Matt, What steps do I take to make a legal 3 family into 4? The Zoning is currently an R3 Residential and the property taxes are currently at a commercial rate
Start with talking to the zoning officer in the town. It could be as of right, meaning in to convert now. They can tell you the process to get it rezoned if necessary.
I'm 24. How old were you and your gf when ya'll bought your first piece of property. And how much was the down payment?
Thanks in advance
if you have the cash to buy 2 duplexes, do you buy in cash or get a mortgage and get 3?
Tom money is cheap right noe, go for the financing and buy 3!
Matt, curious to your "cash out strategy". Are you left now with a huge capital gains tax or are you "cashing out" but still bypassing uncle Sam with another 1031?
This video would be more helpful if you could break down how you structured the deal with partners, what percentage was your profit, and did you just keep getting approved for mortgage after mortgage? We all would like to buy building after building on the same block. We get the 'why', but everyone glosses over the 'how'.
Thank you
Yw!
ok!! Let's say all the investments in this street are as you're saying! And you posted this video in July, 2015; and the last unit you bought was a year and a half from the selling date. Let's say you published this video after a year from the actual date you filmed it (the sale date), then somehow the story of 1/4 value of the last purchase becomes surrealistic since this makes the date of the purchase between 2013 and 2014!!! I can not remember any ression by this period! But I might be mistaken, I only got confused!
But overall, I liked the story! Thanks for sharing.
Hey thanks for the video! My boyfriend owns 6 acres of property in Texas. We are very new to this industry. We are looking into financing a modular duplex home and starting off with that. Our plan is to survey the property by 1 acre and slowly work our way up. Any advice?
Ashley Lopez this is a good question, please email it with some more details to helpme@derosagroup.com and I will answer it on the you tube channel!
What a great story! My question is how does the current market effect this type of investment. With real estate being so expensive in the current market, is it still worth spending the outrageous prices to rent out for investments? I realize its a question and answer with many potential variables. I would greatly appreciate some advice. Thank in advance.
I like the "increased the rent" part.
Value Add, make upgrades like new kitchens, bathrooms, better living conditions and charge for them in new rents.
I am a 27 year old single father raising my son on my own and I find it so intriguing the possibility of making an income from real estate. I hate having a daycare raise my child because of of long 60hour work weeks. I currently own my home but would like to start acquiring rental properties. Do you have any suggestions on how I could get started?
Wow really cool
I saw this apartment deal advertised on comercial real estate website good luck, from those pics they look really nice inside 👍👍
That's actually the new owner trying to flip it, not us lol
How much is the average cost of buying 16 units
Hi Matt,
l have a daughter in Howard University and l am looking for a house to buy around the school so l would rent it to her and her friends. Can you help me with any ideas. The houses around that area are so highly priced.
Thank you.
How levered up are you
I live in Northern California. Prices for a duplex range from 550k to 900k. Cap rates are ok, about 6%. There are some cheaper units about an hour north of us but not by much. I qualify for appx 400k from FHA. should i buy a one unit home first or go duplex? If i cant purchase a duplex what do i do? I have been told to find a "rich uncle" but dont know how long before i pay him back what i borrowed. Just lost, any suggestions?
+NAKGL66 Hi Nak - there are a bunch of options out there, I would have to know more about it to give real advise. Your best shot is to get eduated first. Head out to Bigger Pockets, it's free. Look us up, here's the link to the company founder, Matt Faircloth. www.biggerpockets.com/users/mfaircloth
See you out there!!
Be careful with "Cap Rates", especially around 5 or 6, because unless you have a good way to grow the income of the property... you will probably not see an escalation in the value. In Commercial Units, it is primarily the income, which is what determines the value - aka Cap Rates. So try to buy properties that you have a road map to increase the rents quickly, so you can also build equity quickly.
I bought an 8 plex....3 years later, I took a couple hundred thousand out on a refi, I then bought a 15 unit building. In 4 years I will take money out and buy another and will keep this routine going until I have 60 or more. I'd love to someday own a large 200 unit complex.....what a day that will be!
T McGe how much did you have to put down to get the & plex? And what was your credit score at the time when you got it? If you don't mind aharing
Thanks for sharing...my family has been in the Real Estate Business since the 1950's. A 4-Family that was handed down through marriage to my grandmother and my mother. Unfortunetly, do to my mother's illness, my brother has power of attorney and do to nursing home cost will just sell it now just to get them off his back. We are sick about it. Your good information has been helpful. I will steer him to your website...
Good Wisdom
Did not watch. How did you do it? Section 8
A1 advice
1031 exchange, i have never heard this term till now ty
Flexible apartment complex strategy
I know this an old video and I really don't know your channel, but could you make a video on the specifics of FINANCING these things? I have one unit (a real beauty) and would love to expand, but the jackasses at JPM don't trust me to make it a going concern and won't even accept the income from the current unit as my income for additional mortgage purposes until I've had it for THREE YEARS. Exactly where did/do you get the requisite funds to pull something like this off? Edit: yeah, shame on me for not doing my research and going with JPM in the first place.
Can a 1031 exchange roll into new construction duplexes or 4 plexes?
I believe that you can use 1031 for new construction but you need to find a way for the 1031 funds to pay for the construction costs during all the staging of the project. This can be difficult, so you'll need the right construction lender to comply with you on a 1031
Derosa Group like use the 1031 exchange money to fund the construction loan down payment???
Sweet, I'm also in Ewing Purchased a rental property 2 months ago
Michelet Fleurant Ewing nj is a great market for rentals and flips!
good for you
How do you find investors to go in with you ? Also how do you purchase so many without paying one off first? Banks will still give you Loans on different houses even though you have a few out on other mortgages?
Multifamily loans are considered commercial real estate loans. They are different from residential loans in that they base the loan on the cashflow of the property as long as you can put 20-25% down. If the numbers are good such that you can easily afford the loan, have good credit and can afford the down payment with a little bit of cash reserves, you will get it financed regardless of how many other properties you own. Some lenders do limit the you though if you appear over extended.
Which is easier to sell a 4-unit or a 20 unit? There's more investors and more financing options.for a 4-unit vs. 1 20-unit building
Colorado Loan Pro you are correct the financing is better for 4 units, and they are cheaper so there are more buyers for that property size. the buyers for 20 units are less but you can sell properties of this size for higher per unit in today's market.