Today I want to talk about multifamily real estate investing, and why if you’re considering getting involved in real estate investing of any kind, you should do multi family. I’m Rod Khleif host of the number one real estate podcast on iTunes, lifetime cash flow through real estate investing. I hope you’ll check it out. I’m also author of the book, “how to create lifetime cash flow through multifamily properties”. read more
So if you’re a new real estate investor, and thinking to yourself, I’ll get started by buying some houses to hold for cash flow. I wanted to share a different perspective with you. I have owned over 2000 houses so far in my career that I held long-term for cash flow so I’ve got some experience in that arena. I’ve also owned multiple apartment complexes in various states. In 2008 I had 800 houses and some apartment buildings in Florida when the market crashed. I had my butt handed to me in that crash because I’d been focused on the value of my real estate instead of the cash flow. During that massive downturn my multifamily properties did just fine. They contracted sure, like everything did. But they were still cash flowing positively. But I couldn’t hold it together for my single-family portfolio. Single-family houses are more expensive and difficult to manage than multifamily. Where you have everything in one location, That was a $50 million seminar for me and the main reason I started my podcast and wrote my first book. I wanted to share with people the huge advantages of buying multi-family versus single-family.
So back to those of you that is thinking about houses to buy and rent. I want to suggest that at the very least, you consider buying duplexes, triplex’s, or fourplexes. What’s great about one of those properties is that if you have a vacancy you very often can still sustain it, or if not, your negative cash flow is much less. If you’re young and thinking about buying your first property to live in again I recommend a duplex triplex or four Plex. You can get fantastic residential financing if you plan to live in the property, with great interest rates and very low down payments. I’ve interviewed several people on my show that acquired large portfolios of properties buying them one Plex at a time and living in them.
I’ve also interviewed and spoken with many people that purchased a Plex and now live for free. So that’s my suggestion if you’re new to real estate. Now if you already own some property and you’re ready for bigger and better things there is no greater wealth building platform than larger multifamily properties. So, the definition of a commercial multifamily property is five units or larger. I’m going to talk about some of the great advantages of buying multifamily properties to build lifetime cash flow. Firstly when you buy commercial multifamily properties, it’s a team sport. And what I mean by that is the bank is going to take a hard look at the property and its ability to service the debt and then they will look at and individual or the team you’ve put together for qualifying for the loan.
So if you have a deficiency in your income, or maybe your net worth isn’t high enough, or maybe you don’t have enough cash for the down payment or equity for the deal, or maybe you don’t have the management experience that will give a bank comfort, you can bring people in on your team to supplement anything you need. That’s how it’s done in commercial real estate. And I love telling my students and coaching clients that I would rather have 50% of something versus 100% of nothing. So if you’re interested in the incredibly exciting field of multifamily real estate investing one of the first things you’re going to do is a self-evaluation and look to fill any deficiencies that you have in those areas of income, net worth, experience, or cash, and bring those people in on your team.
By the way my 200 page free book goes into great detail on all of this, and a lot more, and you can click on the link in this video and below this video to get your free copy. Here are some other incredible things about owning multifamily real estate one is that typically it can support help with management, multifamily can also sustain downturns in the economy like I described in my experience, and you are truly building lifetime cash flow. If you’re flipping houses or selling real estate as a profession, every January first you go back to work. But if you acquire enough multifamily property, every first of the month you have checks coming in. Real estate of all types affords you with incredible tax benefits, and multi family is no different.
Most real estate investors pay little or no taxes because of the incredible tax benefits of owning real estate in the United States. So let’s recap. Easier to manage than houses, lifetime cash flow, incredible tax benefits. Learning to buy multifamily real estate is just like anything else. Yes you have to roll up your sleeves and apply yourself but it’s a tremendous amount of fun. I equate it to hunting for treasure. You’ll get a tremendous amount of value from listening to my podcast if you don’t already.
Also my free 200 page book is more like a textbook on the topic and teaches you everything you need to know. From picking an area, evaluating that area, how to find deals, how to talk to sellers and brokers lenders and investors, how to finance the deal, even how to manage it. Make sure you click on the link and get your free copy. If you want to dig deeper I have an incredible course and coaching program you can check out at my website Rod Khleif.com. Regardless of whether you dig deeper with me or you go out and do this on your own, I hope I’ve got you thinking about multifamily if you’re considering real estate investing. I’m rod Khleif wishing you incredible passion and massive success in your real estate investing career.