How To Finance A Multi-Unit Property - YouTube

How to finance a multi-unit property? Are you wanting to get into real estate

investing? Do you want to be an investor? Have rental properties? Get passive

income? But you don't really have a lot of spare cash laying around and you

don't know where to get it. Well, again, I was in the same boat. I'm

going to tell you exactly how to do it with no fluff. Let's go.

So, I'm going to give you a step-by-step guide on how to finance a multi-unit

property without any hassle, without any headaches and without getting tripped up

by lenders. I'm going to share with you 7 ways to finance a multi-unit

property and some secret ones that you probably haven't thought of. And I'm

going to give you my dirty little secret on how to get things done quickly.

Multi-unit properties are like the best type of properties when we are talking

about rental properties. And so many people have been asking me about, "Noelle,

how are you getting all of these rental properties? Should I be investing in

multi units? What does it mean? What are the benefits? Is it too much, okay?" So, I'm

going to break this down for you really quickly so that you know exactly why you

should be investing in real estate, why you should be vesting in multi-unit and

how to know when you're ready. So, the first thing of course is multi units are

properties that are more than one unit, okay? So, a 1 unit property is a house.

Most people just call it a house. But in the professional world, we call it a

single-family residence, okay? It's also known as a single-family dwelling or an

SFR. But when we are talking about multi units, it actually can fall into the same

category. It can fall into a single-family residence because they

consider 2 to 4 units still regular residential property, okay? So, if we're

talking about a multi-unit, we could be talking about a 2 unit, a 3 unit or

4 unit or we can be talking up to properties that are like small but there

are apartment buildings that have hundreds and hundreds of units. We're

talking about multi-unit properties, there's really no clear definition if

we're talking about in the single-family realm or if we're talking about in the

commercial realm where we're talking really big apartment complexes. But in

either case, there's some real benefits. When I started investing in real estate,

I started with single-family homes, okay? I was just finding houses people that

have property problems. I was getting those properties under contract and I

was flipping those contracts called wholesaling. Then I started fixing and

flipping some of those and started getting 50, 60, 70 thousand dollar checks

fixing and flipping. And then eventually, I started getting a lot of rental

properties and I quit my boring corporate job. So, that's my

story, that's what I did. But what I did not do that I'm encouraging more people

to do is start getting into multi-units a little bit earlier. Now, one of the

things that you can do with multi-units and why it is such a benefit for you is

I came into a lot of mistakes when I had my single-family homes. Each home had to

be managed individually. And so that became a really big expense, okay? You

needed a property manager for all of the different properties, you had utility

bills at all the properties. You know, sometimes taxes, insurance all of these

different things. But if you have a multi-unit, then all of those things are

for that just that one place. So, if you have a just using out it makes a small

multi-unit, just say a 4-unit, you know, just like this for unit that we're in

now, okay? This is a small apartment, there's 4 units, each of the units has

one bedroom, okay? Now, when you manage this property, one person can come manage

all 4 of these. There's one tax bill. There's one insurance bill. You get what

I'm saying? It's a lot easier to manage if everything is at one place. Now,

imagine if this was 4 separate houses that would be 4 separate tax bills,

4 separate insurances, 4 separate mortgages. It really starts to get out of

hand and it really cuts down on your profits. So, when you are able to get

multifamily units or multi units and you can have all of your tenants in one

place and all of your expenses at one place, it lowers your risk, okay? Because

if you have a single-family home and no one's occupying it, then you have

100% vacancy. But if you have a 4 unit and one of them is vacant,

then 75% of your units are occupied, okay? You only have a 25%

vacancy. And then you still have income from those other three units. Alright?

So, just a ton of different benefits to multi units. Additionally with a

multi-unit property, financing in many cases is a lot easier, okay? And I'm going

to get into that a little bit later. But just know that there's some tons of

benefits it's less risky, usually higher profits, usually less management. And last

but not least, you have the benefit of easier financing. So now we know why

we're doing multi-families, let's talk about how we're going to do it. So, I'm going to

give you 7 ways right now to finance multi-unit properties, okay? So, the first

one and I'm not going to spend a whole lot of time on this one because this is the

one that a lot of people might struggle with. But please stay to the end because

I'm going to give you the last one as the best one. Sorry about that but that's

what we're going to do. So, this one is actually one that I've use and took my

students still use. Private money. Private money does not have to be with your

friends or your family. It can be. And that is one of the things that I

recommend is you actually starting to find and create a network of people that

are interested in real estate investing. Because like I know there are tons of

people that are interested in real estate investing. The issue is most of

them don't know how or don't have the time. So, many people do have a retirement

account a 401K they may have a little bit of money safe. And they're willing to

invest it. Again, invest. Not just give it to you. Invest in real estate. Some

tangible income producing property. Most people are going to be interested in

that but they have to be able to trust that you know what you're doing. So, by

educating yourself, learning the lingo, learning the terms and learning what to

do with property, you can easily solicit private money. Do not think that you

don't know anybody because it doesn't take a lot of money. Most people have 40,

50 thousand dollars on the low end in their 401K. And you're only asking for

5 or 10 thousand dollars. In many cases, I've had multiple people pull out

a little bit of money from their 401K and we bought multi-unit properties. So,

just no private money is an answer, okay? So, that's private money as in people

that you know. And then there are private lenders,

okay? There's tons of lenders out there that are willing to do some short-term

financing or do some personal loans and things like that that can provide you

the money that you need either for the down payment or to fix up the property

and purchase the property yourself. So, know that private money is one of the

ways to finance multi-unit properties. Number 2, you can do equity partnering.

There's 2 different ways to do this and this is absolutely phenomenal.

Actually almost was resistant to give this

so early because so many people are going to be like this is the answer and

just run off and I don't want I want you to watch this whole video. But equity

partnering. I have a ton of students that do this now. What you can do of course

with real estate because it is a tangible thing and most people do want

to invest in real estate and they understand the business a little bit to

some extent, is you can actually create a business where you are going to purchase

real estate. Again just get an LLC or S corp. You just register the business,

doesn't cost very much money. And then when you are soliciting people to buy

into this, you can give them equity in your company, okay? You literally say, "Okay.

For this 10,000-dollar investment, you're going to own a portion of my

business. Whatever you know percentage you say. And you will split the rental

income with them, okay? This is a very easy way to finance multi units, okay? So,

for example, say, you are buying a 4 unit and it is considered a

single-family residence and there's tons of loans out there --Fannie Mae, Freddie

Mac, FHA where they will finance almost 97%, okay? The

loan is almost 97%. And you just put down 3 or 3.5

percent. So, you can literally get that money from one of your investors,

the down payment. And then you give them a portion of your business and you share

the rental income with them from those other units. And you're the one that's

going to manage the property, you're the one that's going to do the work. And in

many cases, you may even put the loan in your name but they provided the

downpayment. So, this is an awesome way to start partnering with people, getting

more people involved and teaches you how to start raising money and getting money

from other people start having those conversations and get more and more

people involved in your real estate with it is other people's money. That is

getting you your portfolio building. Number 3, hard money loans. Hard money

loans. Many real estate investors are familiar with the term hard money. But

I'll explain to you what it is really quickly. So, hard money loans are loans

that private lenders give just for real estate investors, okay? So, they do not

usually lend on properties that are just like a single-family home that you're

gonna live in. So, this is why it's perfect for multi-unit because if you're

buying, again, using our example you're buying a 4 unit,

even if you're going to live in one of the units and run out the other ones, a hard

money lender (of course you're not going to move into that one immediately) will lend

you the money to buy the property and in many cases, the money to fix the property

as well. And you just have to make interest-only

payments to them. And so, a lot of times with multi units, we fixed a lot of them

up. You know, we remodel them make them look really nice and modern. And so that

they can make a lot of money, okay? So, once you get the hard money loan, they

will literally loan you the money to do all of that. They will loan you the money

to purchase the property and to fix the property up. And then once you have done

those things, you refinance out of that loan. That is why it's called a hard

money loan because the interest rates are a little bit higher. You know, I'm

being honest with you. So, right now mortgage rates on mortgage loans are

like 3 and 4 percent. We're on a hard money loan. They're closer to 10,

12 percent in many cases and could be even higher depending on your credit.

However, they are a lot easier to get because in most cases they lend on the

deal, okay? They lend on "Will this property be making money? How much will

it be worth after you fix it up? What is your experience fixing up property?" If

you've picked fixed up properties before and you can document that, it is so easy.

Actually for me now that I've been doing this many years, it's so easy for me to

get hard money loans because they make a lot of money doing them because the

interest rates are high. So, just know that there is money out there with hard

money loans. So, that's another option. Number 4, house hacking, alright? So,

this is the example that I said before where you were buying 4 unit for

example and you were going to live in one of the units. Again, you can buy a 2

uni,t a 3 unit or a 4 unit pretty easily. Almost the same process as you

would buy just a single-family home. And so, if you're going to go through that same

mortgage process and they have those same loan terms where they will lend you

most of the money and you're only coming up with maybe 3% or

in some cases, you don't have to come up with anything. There are downpayment

assistance programs available. I'll give you a link to that a little bit later if

you want to look into that. But again, you can literally buy those homes with

almost no money out of pocket, okay? And you house hack because you live in one

of the units. And then the other units are able

to pay those mortgages off. So, that is a pretty easy way to finance multi-units

is by house hacking and literally living in one of the unit's. Because then you

can get financing at very high loan-to-value. Also known as LTVs where

they will loan you 97% or 100% or 95

of the mortgage. So, just giving you a quick example. If you were buying a

4-unit, it was just... Say a 2-unit. You were going to live in one and rent out the

other one. So, you're buying a 2-unit, it cost $100,000. Again,

just using round numbers. And you had to put down 3%. That would be

$3,000. Now again, there are downpayment assistance programs

available to even provide you that 3,000. So, literally you can buy a home

for a primary residence, live in one of the units and then the other unit, you

manage and collect rent on and it's able to cover your mortgage. So, house hacking

has become a lot more popular. But in my opinion still not popular enough. More

people are not doing this. And it is an amazing way to start getting multi-unit

properties and having properties that produce income for you. Loans. The next

thing of course the financed multi-unit properties are loans. You literally can

get mortgage loans from FHA, Fannie Mae, Freddie Mac. There's tons of mortgage

lenders that lend on multi-units. Now again, if you are going for 2 to 4

units, you will stick with the Fannie Mae, Freddie Mac, FHA government loans. If you

are talking about more than 5 units, you're going to be into a different loan

category. Again, Fannie Mae and Freddie does make loans on commercial real

estate. But the terms are a little bit different. And you usually need a lot

more down payment, okay? So, if you wanted a 10-unit apartment building for

example, even if you were going to live in one of the units, it would still be

considered commercial financing and you're not going to be able to just get

downpayment assistance and things like that. However, there are some real

benefits to those bigger units because obviously the more units you have, the

more income that you're usually receiving from those properties because

you have more units to rent out. So, finding the money and financing even

5 units, 10 units properties; 12-unit apartments is

not as difficult as you would think. In fact I have a whole video on how to get

financed for small apartments and I'll put a link below for you.

Number 6, finding for sale by owners and having them do seller financing. So, one

of the things that I've just love, love love about commercial real estate and

multi units and things like that is that of course, you have more units, okay? So,

you have the ability to already see that the property is making money. That is

such a big deal because if someone already has a rental property (for

example, okay?) where you seek out landlords, okay? Let me kind of break this

down for you. Where you seek out landlords, seek out for sale by owners of

multi units and they can finance the property for you, it's called seller

financing wherein they may be tired of managing the property. We have a lot of

older people that are getting out of real estate investing which is why I'm

trying to encourage more of you guys to get in it because we are going to have a

shortage pretty soon if more people do not learn this business and get involved.

We have a lot of older people, baby boomers getting out of it and wanting to

do something else or just straight-up retire but they don't want to just give

up all of their properties. So, many of them, tons of them actually don't want to

just straight out sell it. They want to do seller financing where they keep

getting some revenue each month, yet you are buying those properties or you're

buying that portfolio of properties from them. So, seek out for sale by owners of

multi-unit because many of them will do seller financing. You can talk with them,

you can deal directly with the seller, you can talk about what your terms are,

how you're gonna manage the property, what you can do, what your benefits are

and how you can help them in their situation so that they can retire. And

number 7, this is the granddaddy of how to finance multi-unit properties

today, okay? This is the fast way, this is the awesome way. Many people do not know

about it and it is real estate crowdfunding, okay? Now, crowdfunding has

become popular. You see people need money for the band or they need money for

their school. Well, those are those type of crowd funds. But we have real estate

crowd funds where you can literally go to

sites like trucrowd. And you can actually have your own crowdfunding

created where you go through and you solicit people to put in as little as a

hundred, 250 dollars, $500 whatever it may be.

They put that money in and you buy real estate with it. And you split the profits

with them. We literally have our own crowd fund

that we started. At the end of 2019, we didn't launch it until February of 2020

and we literally have over $200,000 raised. We've been able

to buy lots of properties and we're even doing quarterly distributions to our

investors. You can do the exact same thing. You can either invest in what

we're doing or you can emulate what we're doing. Go

to trucrowd and you can actually look up what we're doing. My company is NUUREZ.

N-U-U-R-E-Z INC. Nuurez Inc. And what we've done is we've created a crowd

fund. We've put it all together. Again, it goes through the Securities and Exchange

Commission, the SEC. You have to get vetted by the government and make sure

you don't have any criminal background or you're not a financially

irresponsible person. And you literally can get your own crowd fund started in

really a short amount of time. Like I said, we launched the company officially

in February. And at the time of this recording, we have well over $200,000

raised. Half of it... And I think over there's probably at this time

this recording is well over a hundred and some are thousand on the trucrowd

platform. And then we've gotten some private investments as well. And we're

doing quarterly distributions to our investors sharing the profits from our

real estate. So again, you can do this too and this is the new way to raise money

for investments. It's a new way to invest in real estate and the new way to start

making money in real estate. So, hopefully I did not overwhelm you with all of that

information and this was really great content for you. Again, just want to

please remind you to go check out trucrowd.com and go check out NUUREZ,

N-U-U-R-E-Z, ".com". We are buying multi-unit properties and we're litter

making them short-term rentals. So our profits are through the roof. We are

expecting to make a lot more money than we did with normal rental properties. You

can read and see all about what we're doing, how we're allocating the funds,

what our plan is and what we're doing. And again, you can invest in NUUREZ or

you can emulate what we're doing. This is Noelle. To your success.