Expert: Brian Bocchieri - 3/4/2009

Question
my husband & i are VERY interested in buying multifamily and apt bldgs, but don't see how it turns a profit, after the 25-30% dwn pymt it still doesn't add up. we've read that we need to buy 25-30% "below market value" in order to make a profit. how and where do we find those properties in new york or anywhere for that matter. can you help us

Answer
Hello Darlene

New York is a very tough market.  

What you need to be looking at is Bank REO's, or Foreclosures. Another good source is burned out landlords.  Check around at the county courthouse find apartment building with many violations that is usually a good sign of a burned out landlord or out of state owner.  You can then send them a letter or call them to see if they are willing to sell the property.  These you can usually pick up at a good price then improve the property in order  to increase the cashflow.

I do not know your experience level but if you purchase buildings with 5 or more units the property then qualifies for commercial financing.  Properties of 4 units or less only qualify for conventional residential financing.  When moving into the larger properties the properties' cash flow is what qualifies for the loan not your personal finances.  

I hope this has helped please feel free to contact me again should you need further assistance.

Wishing you all the best.

Brian Bocchieri