Table of Contents
Preface 14
How This Book Is Different 17
Chapter 1 An Introduction to Multifamily Properties 20
Defining Multifamily Properties 21
Eight Reasons to Love Small Multifamily Real Estate 25
Small Multifamily Real Estate Frustrations 31
The Multifamily Millionaire 34
Key Takeaways 34
Chapter 2 Financial Freedom in Five Years? 36
The Stack 40
Between Comfort and Ability: Your Growth Zone 45
Key Takeaways 47
Chapter 3 Getting Crystal Clear on Your Criteria 48
Developing Crystal-Clear Criteria 49
What if You're Not Sure What Criteria to Choose? 53
Fear Not 56
Key Takeaways 57
Chapter 4 Property Type (CCC No. 1) 58
Narrowing Down 59
Moving On 71
Key Takeaways 71
Chapter 5 Choosing Your Location (CCC No. 2) 72
Local or Long-Distance 73
Appreciation versus Cash-Flow Markets 78
Neighborhood Classification 81
Population Trends 84
Job Diversity 84
Key Takeaways 84
Chapter 6 Property Condition (CCC No. 3) 86
Four Advantages of Investing in Fixer-Uppers 89
Four Disadvantages of Investing in Fixer-Uppers 92
The Baby Bear Rehab 95
Key Takeaways 96
Chapter 7 Price Range (CCC No. 4) 97
Setting Your MaPP 98
Setting Your MiPP 100
Key Takeaways 101
Chapter 8 Profitability & Analysis (CCC No. 5)* 102
Pure Cash Flow 104
Square 1 Income 108
Square 2 Expenses 112
Square 3 Pure Cash Flow 125
Square 4 Cash-on-Cash Return 126
Setting Your Criteria and Next Steps 131
Key Takeaways 132
Chapter 9 The Multifamily Millionaire Model 133
The Vital Differences Between How Properties Are Valued 134
An Introduction to Cap Rates 136
Simple Math 140
The Multifamily Millionaire Model 142
Key Takeaways 148
Chapter 10 The Strategy for Finding Great Deals 149
The LAPS Funnel 150
The Bottom Line 152
Key Takeaways 153
Chapter 11 Finding Small Multifamily Deals On-Market 154
Getting into the Classroom 156
OnFire Agents 157
Four Tips for Finding Deals on the MLS 162
The MLS Is Not Dead 167
Commercial Brokers and Marketplaces 168
Should You Get a Real Estate License? 169
Key Takeaways 169
Chapter 12 Finding Small Multifamily Deals Off-Market 170
Off-Market Strategy No. 1: Driving for Deals 172
Off-Market Strategy No. 2: Direct-Mail Marketing 173
Off-Market Strategy No. 3: Networking with Landlords 177
Off-Market Strategy No. 4: Working with Property Managers 178
Off-Market Strategy No. 5: Working with Local Wholesalers 179
Off-Market Strategy No. 6: Online Marketplaces 181
Don't Forget the LAPS Funnel 183
Key Takeaways 183
Chapter 13 Walking a Property-What to Look for 185
Key Takeaways 195
Chapter 14 Traditional Financing for Small Multifamily Properties 197
Debt or No Debt? That Is the Question 198
The Loan Process 205
The Lender's Combination Lock 210
How to Find a Great Lender and the Perfect Loan 213
Key Takeaways 219
Chapter 15 Creative Financing Part I: House Hacking 220
Types of House Hacks 221
Why House Hack? 224
Analyzing a House Hack 227
House Hacking FAQs 229
Key Takeaways 232
Chapter 16 Creative Financing Part II: Partnerships 233
Financial Partners 234
The Deal Delta 237
Finding Money Partners: Dig Your Well 238
Convincing Money Partners: The KITE Method 240
Debt and/or Equity Money Partners 242
Key Takeaways 243
Chapter 17 Creative Financing Part III: BRRRR 244
Analyzing a BRRRR 247
Six Benefits to BRRRRing 252
Risks and Rewards: Four Keys to a Successful BRRRR 256
Key Takeaways 261
Chapter 18 Making an Offer That Sticks 262
How Offers Work 262
How to Make an On-Market Offer 264
How to Make an Off-Market Offer 265
Eleven Tips for Making a Compelling Offer 266
After Submitting Your Offer 269
Key Takeaways 270
Chapter 19 Due Diligence 271
Lining Up Your Title Company or Attorney 272
Property Inspection 272
Five Seller Documents to Inspect 274
Other Due Diligence Considerations 276
Signing the Documents 279
Key Takeaways 280
Chapter 20 Managing Small Multifamily Properties 281
Self-Management versus Professional Management 282
Hiring a Property Manager 285
Self-Management 286
Becoming a Five-Star Landlord 289
Key Takeaways 299
Chapter 21 Accounting, Taxes, Legal Entities, and Terrible Puns 300
Bookkeeping Basics 301
Depreciation 304
The Amazing Tax Benefits of Depreciation 305
The 1031 Exchange 307
Hiring a CPA 309
LLCs and Entity Issues 310
Key Takeaways 313
Chapter 22 Getting to the Next Level 314
Appendix A Multifamily Repair Budget Algorithm (MRBA) 317
Appendix B Multifamily Capital Expenditure Budget Algorithm (MCEBA) 326
Acknowledgments 331
