The key to multi-residential property investing
by David Kitai

Multi residential property investing is a fabulous strategy to gain economies of scale, diversify the asset classes within your portfolio and enhance cash flow.

The beauty about this strategy is that financing is primarily dependent on the performance of the building, whereby the lenders look at the Net Operating Income ( NOI ) to determine what the building qualifies for, furthermore there are a variety of creative financing structures that are available to you as an investor that are not applicable in the residential world to properties with one to four units.

In order to be successful at multi residential property investing, it is important to learn how lenders look at things:

• How do they determine what a building qualifies for?
• How do they look at value increases due to renovations?
• How location influences decision making?
• How do your personal finances play a role?
• How do lenders look at 3rd party sources of capital? For example, through joint ventures or investing with others.

It is also important to learn about capital structures:

• What is allowed / not allowed when it comes to down payment?
• How to best structure your deals when others are investing with you?
• How can you utilize vendor take backs and do lenders allow them?
• How can you fund a renovation to transform the buildings NOI and value?

Finally, how to get approval ready to invest in this strategy and how to apply some of the commercial lending rules to open up room for approvals on your residential portfolio if you have maxed out with the traditional lenders.