By Mike Bodeen · 28 August 2017
My family has successfully invested in multi-residential properties in the Phoenix area over the years and we’re in process of doing so again. My only regret is that we didn’t buy more before. What types of multi-residential am I speaking of? Well, I’m not talking about a 100-unit apartment complex, but it could lead up to that. But more like a duplex, triplex, four-plex, even up to 12 units. This could also include a single family residence, but I don’t see the same monthly income potential being able to cover expenses, plus positive cash flow. I’m more inclined to Tri’s and Quad’s.
So why don’t more financially able folks consider purchasing multi-properties? Well, for one, real estate is not a big fan with many (most) financial advisors. Why? Well, candidly, there’s no income potential for them. Many advisors make their money on selling their clients stock-type investments. And here me out, I’m not against this. I have stocks, which includes a good financial advisor, but I believe a healthy portfolio includes well-balanced long term real estate investments too.
My dad was my best example. He was a butcher by trade, owning a small grocery store in San Rafael, California, with two other partners. He worked long hours. Each week he would drop by his bank to deposit his paycheck – meager by today’s standards and not that great for . Periodically, the teller would see a healthy balance in his savings account and would have a bank financial advisor say to him, “Hey Johnny, you have a good amount of funds in your savings account. Should we pick up some more PG&E stock? And he would. He trusted his advisors, and they were good to him. And his funds grew.
He would later buy 12 units in Phoenix, and in a few years, by upgrading them and raising rents as units became vacant, we could secure higher rents. We never raised rents on anyone as long as they remained in good standing. The rents paid all expenses plus enabling us to upgrade the units. When we sold them three years after the purchase, we were well rewarded with a healthy profit.
Here’s an idea for a single person or couple. If you’re renting an apartment now, why not invest in a Tri or Four Plex, live in one unit while renting out the others to pay your mortgage. Regular residential financing is available for up to four units too. How does rent free sound to you?
Just a thought. Give Jon or I call for more information. We’d love for you to get started.