Your main obligations as an owner of a multi-family investment property is to generate sufficient income in order to meet current debt services like your mortgage payment, property taxes, and maintenance and management fees. Once your income levels rise above your total debt services, you’re on your way to greener pastures.
With a single-dwelling rental home, you’re the one who has to do all the work. Sure, you can afford to bring in a plumber if the toilet explodes, or a landscaper to mow the lawn; but for the most part you’re all on your own. If anything goes wrong, if there is a water leak, if the water heater goes, it’s you the tenant is going to call. You’re going to be spending a lot of time attending to your rental property’s needs, no way around it.
Maybe all the doors and the garage door need to be replaced to make the property attractive and livable. If you replace the garage door, you are going to get a dollar for dollar return. You put ,000 in, and you are going to get ,000 out on the sales price. Or in some cases there may be repairs that you will not get anything out of.
So you see? These investing 101 tips are recommended by the most well-known investment experts. The only thing that’s different is the way they say them.
Let’s say that you have ,000 and you invest it in a stock. It doesn’t really matter what the investment vehicle, just that you are investing in something you expect to receive a positive return on.
No cash reserves – It’s all about the money so don’t ever forget that. True, you don’t necessarily need to use your own money but you will definitely need cash to make deals happen. Even if you only plan on flipping houses, you’ll need cash reserves for certain contingencies that will come up.
C. No need to take ownership of the property, just get it under contract and pass the deal on to the best buyer/investor, with what is called an assignment fee (up to K) added on to the negotiated price.