Closing Costs When Buying a Multi-Family Apartment Building

October 22nd, 2020 by admin No comments »

When buying a multi-family building as an investment property, closing costs can add up to a large amount, and thus should be calculated with careful attention since the investor needs to estimate if he has enough funds for the down payment and the closing costs prior to closing the deal.

It is also important to estimate how much cash is needed to put aside for the closing costs prior to closing since one of the bank’s conditions when approving a mortgage is making sure the buyer has enough funds for the down payment and closing costs together.

Appraisal Fee: This requirement is helping the bank to assess the market value of the property, so that it can estimate the LTV (loan-to-value). If the appraised value is $500,000 and the LTV is 80%, then the bank is willing to loan $400,000 out of the total assessed value. Appraisal fee is usually a must with insured mortgages, but for conventional mortgage, it can sometimes be waived at the discretion of the bank that provides the mortgage. Appraisal fee depends on the size of the multi-family buildings and other considerations. The appraisal directly correlates to the size of the building: the larger the building, the higher the appraisal’s fee.

Phase 1 Environmental Fee: Environmental analysis of the property and all surrounding uses or conditions to make sure the property and its surrounding aren’t contaminated from any past use of chemical, oil tanks and other hazards. Usually this fee is associated only with insured mortgages only and not with conventional ones.

Inspection Fee: Inspection fee includes careful inspection of each unit in the building to make sure there is no structural problem with any of the units and the building overall. Inspection should be done only by a professional, since missed issues by him can later on cost you a lot of money to repair. The more units to inspect, the higher the fee that is charged by the inspector.

Land Transfer Tax (LTT): This fee depends on the province the multi-family building is purchased in. Specifically, if the property was purchased in Toronto, the land transfer tax needs to include Ontario LTT and Toronto LTT.

Legal Fees & Title Search & Disbursements: Each transfer should be reviewed legally by a lawyer. A lawyer is in charge of completing the transfer of the deed, preparing the mortgage, and conducting various searches such as, title search.

Land Survey Fee or Title Insurance Fee: A recent survey of the property is usually a requirement of the lender. If non is available, then title insurance can replace it.

Mortgage Application and Processing Fees: This overall fee depends if the mortgage is insured or not. If the mortgage is insured, then the investor needs to pay both the insurance company (CMHC or GE) and the lender itself. CMHC charges processing fee and mortgage insurance premium depending on the amount being loaned and the amortization period. On top of that, each lender charges application fees as well. The lender’s application fee depends on the institution the money is being lent from.

Reserve Fund: Reserve fund should be added to the closing costs to make sure that in the first couple of years (before any cashflow has been accumulated) there is enough money to be spent in case “big item ticket/s” need/s to be fixed/replaced, such as leaked roof, furnace stopped working, etc.

It is very important that you search around for different professionals before deciding on which one to go with. Your considerations when choosing should include price, reputation, and efficiency.

In conclusion, the total amount spent on closing costs can start from 2.5% of the purchase price and go up to much higher amount depending on various factors, such as the amount put into the reserve fund, the province you choose to buy your investment property in, etc

Practical Guide in Multi-Family Apartment Investment

October 15th, 2020 by admin No comments »

When you have reached the level of competency and confidence to handle multi-family property investment, it is best that you seriously consider this strategic investment shift. Seasoned real estate investors usually graduate to this type of investment option to improve their cash flow and earnings. This goes beyond the opportunity of receiving higher rental earnings as a result of a greater number of units for rent. The earning opportunity is associated to economies of scale. This means that with higher number of rental units in one location, there will be more opportunities to cut cost through several means.

• Savings in Repair and Maintenance

The unit cost for repair and maintenance can be significantly reduced in multi-family property investment whether you are contracting the volume work from a service provider or hiring your own in-house service personnel. If you will consider the savings that you generate over a period of time, the amount will definitely be very significant.

• Upgrades and Purchases

Whether it is brand new painting units or refrigerators, you can leverage for better deals and discounts from suppliers and dealers when you negotiate for volume purchases. The potential number of units to be purchased is one great equalizer for property investors to clinch good deals and substantial cutbacks on the purchase price. With this significant leverage, you achieve a certain degree of clout when dealing with dealers and suppliers of furnishings, appliances and other items that you will need in the operation and maintenance of your property.

• Property Insurance

Building apartment units is less expensive than building single detached homes. Thus, it is logical that the property insurance will also be lower for the former. In addition to this built-in advantage of apartment units, there is also that leverage of owners of multi-family property investment when negotiating for insurance. With apartments, you will only have one single policy to cover all the units of your apartment property. The significant reduction on the price of the property insurance is due to the distribution of the overhead cost to a greater number of units compared to individual single detached units where each will have to bear the brunt of the full amount of the overhead cost.

Financing Options for Apartment Property Investments

Capital requirement for a property investment of this scale is one of the major challenges. Property investors must really need to have deep pockets if they intend to enter into this kind of venture. Property construction is not easy and it requires substantial amount of capital. In most cases, not many people have this amount of money available to start such a big project. However, with proper planning and careful management of available finances, one can avail of financing to support multi-family property investment. Those who don’t have sufficient amount of capital can opt for multi-family property refinance loans.

You can check out potential financing programs for your property investment online. You can easily get a quote for a particular loan amount in addition to the details and terms of the financing programs on offer in these websites. This makes it easier for property investors to shop around and weigh their options without having to physically coordinate and consult with all these banks and mortgage companies. It also simplifies the process as you already have all the information that you need at your fingertips, and you can confidently make your decision and come up with your short list of choices or options.

Investing in multi-family apartment is not a piece of cake. It requires years of experience, training and sufficient amount of cash. However, with proper planning and support, you can enjoy better earning capacity and maximize the returns of your investment in real estate properties.

Real Estate Investing In Multi-Family Apartments

September 25th, 2020 by admin No comments »

Some investors find investing in multi-family apartments rewarding as they yield more long-term returns. An average individual investor cannot invest in multi-family apartments by himself; they make use of specialized REIT’S to do it for them or form a partnership with an experienced associate as it takes up time and needs an experienced person to see to the due-diligence, to take control and manage the property wisely.

Tips on How to Invest In Multi-Family Apartments:

It is necessary to identify a stable, profitable multi-family apartment, have a good idea of the local market and the have the ability to estimate the land value as well as the building value properly.

It is essential to make a financial as well as marketing analysis of the property.

Present a well thought out irresistible offer to the seller once you have made sure the necessary finances are in order.

Proceed with the due diligence and not be satisfied until you have studied in detail every document relating to the building and the maintenance of its equipments etc. The title deeds, tax returns of last 3 years if possible, insurance policies, financial records, information of any existing liens, all leases and all contracts for equipment maintenance, parking lot contracts, all utility bills, fire systems, litigation history, tenant and associated problem records etc. will be appraised. Engineering inspection, environmental inspection etc. will be conducted on site.

Have an attorney study all the documents and explain them to you.

Once the due diligence matters have been cleared it is time to bargain for as low a price as possible and legally purchase the property if it suits your needs and seems a profitable venture.

Try, and get a triple net multi-family apartment, as it could be a hassle-free investment as the owner just has to receive monthly rental checks and does not have to worry about maintenance etc. as the tenants are in charge of that!

People like investing in multi-family apartments because of increased cash flow, competition is less, if indeed you are in charge of maintenance because of the big cash flow it will be easier to hire a manger to take care of the property and deal with its problems. Multi-family apartments are also in demand because the property appreciates better than a single-family property. Some creative real state investors make fortunes rehabbing run down condos and giving them a face-lift! Thus, multi-family apartments are ideal suited for those who have large sums of money on hand to buy and invest in high yielding properties. They should have the expertise to deal with tenants and collecting rents on time and know what action to take incase the tenant defaults on payments.

How to Find Perfect Family Apartments For Sale in Milton Keynes

August 11th, 2020 by admin No comments »

Milton Keynes, one of the biggest towns of United Kingdom, is situated near North West London. Since, this town is comparatively new, it is quite well planned, and organised. You can find the best facilities to live here. A source says that almost 7-9 families shift to Milton Keynes every day, which is a good example of how popular this place is. Finding a perfect apartment in Milton Keynes is not a very tough job. You will find a lot of apartments that matches your criteria.

Milton Keynes is a very famous residential area. You can find luxury apartments on reasonable prices. The town is conceptualised in a great manner, and since the town is very close to cities like London, people find it convenient to work in big cities while residing in one the best towns.

It is not very difficult to find perfect family apartments. You can simply contact a property agent, and he/she can guide you accordingly. You should have a proper knowledge of the town, so that you can decide, which area you would prefer for living, or which area suits your living style.

The best thing about Milton Keynes is that you can find all the luxuries of life. There are big shopping malls, hospitals, schools, good transport system, parks, and everything that is required for a nice and comfortable living. The apartments are well maintained and well designed. The old apartments are renovated to keep them in a proper shape.

If you are looking for a perfect apartment, you have to be very clear about a few things. Looking for an apartment with random thoughts will make things difficult for you. You should be aware of what kind of apartment you need, how many bedrooms, and what kind of facilities. In addition, you have to decide if you would like to have an apartment in the hustle bustle of the town, or a little far away. The flowing river and huge green lands is very soothing to the eyes, and the environment looks extremely nice

The homes that are located far away from the busy town are cheaper as compared to the homes located near the town. You can choose whatever is suitable for you. The apartments are very well maintained, so if you decide to go for a cheaper apartment that does not mean that the apartment will be of bad quality. You will find every luxury there as well, but first, you need to finalise the location.

Once you have finalised all your details, you can inform the property agent about your requirement. He/she will help you to find the most suitable apartment for you. It has some really nice and expensive areas such as Caldecott, and other good residential areas such as Willen.

The price range of houses may differ because of the locality, and size of the homes. You can find big luxurious homes as well if you can afford to buy one. Milton Keynes is undoubtedly a nice place to live with your family, and finding a perfect apartment is not that difficult.

Multi-Family Apartment Loans

March 13th, 2020 by admin No comments »

There are a number of different multifamily apartment financing programs available. They are generally divided into small apartment loans for properties costing between $1 million and $5 million, mid-balance loans for transactions between $5million and $25 million, and large financing programs lending for transactions with no specified upper limit, and a bottom limit of $2 million.

Small multifamily apartment financing

The Fannie Mae loan program offers financing for multifamily apartments with more than 5 rental units. The loan amounts are between $750 thousand and $3 million dollars and have terms of between 5 and 30 years. Another option in this category is a multifamily FHA loan, which is administered by HUD. These government loans are attractive because they do not depend on the volatility of the market. The source of financing remains in place because it is government allocated and controlled. Small conduit multifamily apartment mortgages are also available from 1$ million to $5 million and terms of 5 to 20 years.

Mid-balance and large multifamily apartment financing:

The same basic categories apply to mid-balance multifamily apartment financing as noted above. There are the Fannie Mae programs, FHA loans, and small conduit loans for these monetary ranges. There may be other types of loans available in addition to these so ask your loan broker about the programs they recommend.

How to get approved for multi-family apartment financing:

Specific programs have their own criterion for borrower approval. These lenders base their decision both on certain criteria that the borrower must meet and stipulations for the multifamily apartment being purchased. An example will serve to illustrate this.

Let’s say you are trying to take out a small multifamily apartment loan under the Fannie Mae program. They require that your FICO credit score be higher than 680, and that you have a minimum of 2 years’ experience with 2 multifamily properties. They also require that the post closing liquidity (that is, the amount of cash you will have after purchase of the apartment building) is equal to or greater than the loan amount.

As concerns the property itself, it must be able to demonstrate an average 90% occupancy in the 12 months prior to receiving the loan and it must have 5 or more rentable apartments. The properties are also restricted in most cases to 25 year amortization schedules.

Multi-family apartments are a good real estate investment in these troubled times. The demand for multifamily housing remains fairly steady and the existence of multiple players (i.e. the borrower, tenants, lenders, and possibly government sources) in the cash flow patterns of the transaction distinguish it from other lending and borrowing markets. So if you are thinking of getting into real estate investment, this is a potential area to consider.

Always prepare before you make a choice. There is so much info about nodepositbonus at https://nodepositbonus.codes

Marketing, Promoting and Advertising Your Business

February 28th, 2020 by admin No comments »

One thing that goes without saying in today’s business world, is that regardless of the nature of your home based business, a website is an absolute MUST. Whether you have a product or service to sell, whether local or global, your business will go nowhere fast if you don’t have an online presence. If you need internet marketing help, you’ve landed on the right article. I’ll give you some home based business marketing ideas that will help you promote your business successfully.

The first step is choosing a domain name and getting it registered. You can build your own website (if you have the time) and host it yourself or you can have everything done by another company (if you have the money). Either way, you have many options and tools at your disposal that can align with your business plan and budget. Also note that you can still start your own home based business even if you don’t have a product or service to sell. There are thousands of individuals and companies that have products you can sell for them while earning a commission, called affiliate marketing.

Of the many business marketing strategies known to man, internet marketing is, hands down, the best strategy to use for promoting a home based business as it is the cheapest method and has the potential for reaching millions of people all over the globe. Driving traffic to your site through online resources is like killing two birds with one stone. You can tackle print advertising by writing articles and publishing them to directories and ezines and by submitting ads to the many available (and most of them free) classified ad sites. Online media advertising encompasses writing press releases and distributing them to press release sites. One of the biggest and most popular online advertising trends today is via social media advertising through sites such as Twitter, Facebook, and LinkedIn where you build relationships with your customers. Forums and communities are also great ways to build relationships which helps promote your home based business in the long run. Simply Google your market or industry with the word ‘forum’ or ‘community’ behind it and search for one or two that seem to be the best fit for you.

All of these methods of online advertising contribute to search engine optimization (SEO), which is to say improving your online visibility and escalating in the search engines like Google, Yahoo and Bing. Your goal is to claim the #1 spot in the organic search results (the results on the left, not the right side which are paid ads). This is where your traffic will come from. If you are 800 in the list of search results, no one is ever going to see your site because very few people have the time or patience to scroll through 800 search results. Research shows that people typically won’t even scroll past 4 or 5 search results, let alone 800.

Can you grasp the importance of internet marketing for any business? If you are new to the internet marketing phenomenon and don’t know exactly where to start, there are many great programs or systems online that walk you through every aspect of marketing your online business. A lot of these systems were created by online entrepreneurs who have spent thousands of their own dollars trying to figure it all out over the years and finally DID. Their sacrifices have made it easier for newbies to become successful at their own online home based business. If you are new to running your own home based business, I recommend you find a great system (do your research, read reviews, ask questions in forums) and start marketing your home business from there. Don’t waste the time and money that so many of us have in going it alone, without a proven system, as it will just set you back further and hinder your progress.