Multifamily Real Estate Investing Rules of Thumb
4.5 (468 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
1,982 students enrolled

Multifamily Real Estate Investing Rules of Thumb

Learn to become more confident in analyzing opportunities and making offers that land you highly profitable real deals.
4.5 (468 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
1,982 students enrolled
Last updated 1/2016
English
English [Auto]
Current price: $34.99 Original price: $49.99 Discount: 30% off
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This course includes
  • 1.5 hours on-demand video
  • 24 downloadable resources
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
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What you'll learn
  • Analyze deals and investing opportunities with more confidence and accuracy.
  • Understand Cap Rates and how to use them in their investment strategy.
  • Have much greater confidence in doing due diligence for an investment.
  • Have an accurate investment goal through cash on cash returns.
  • Understand property management costs and savings.
Requirements
  • Included with this course is the Rule Of Thumb ebook. We highly recommend that students download this book, print it out and follow the course alongside the Rules Of Thumb ebook.
Description

This course lays out our guidelines and parameters for a great deal. Multifamily Real Estate Investing Strategist and Consultant, Gino Barbaro will help you get a strong understanding of cap rates and cash on cash returns, vital for beginning investors to learn about in order to correctly analyze a deal.

What formulas should you use? In this course, you will be able to analyze a deal faster and with higher accuracy using our Rules of Thumb.

What are some of our rules?
  • Cap Rates: What is a cap rate, and how will you best use them in your investment strategy?
  • Cash on Cash Return: We will detail the return we strive for with our investments and help you define yours? (hint: 10%)
  • Debt Coverage Ratio: What ratio will your bank look for when deciding whether to provide your business with financing?
  • Management Fees: What are the going rates to manage your properties?
Once you learn the basic rules of thumb, you will become more confident in analyzing deals, going through the due diligence phase, and putting in offers that will land you deals. You will also learn how to manage your property more effectively.
Who this course is for:
  • This course is ideal for beginner and seasoned real estate investors looking to get a strong understanding of Multifamily Real Estate Investing.
Course content
Expand 25 lectures 01:41:15
+ Rules of Thumb For Multifamily Real Estate Investing
25 lectures 01:27:15

This book lays out our guidelines and parameters for a good deal. Here we discuss cap rates and cash on cash returns that we strive for. It is vital for beginning investors to learn how to correctly analyze a deal.


What formulas should I use? You will be able to analyze a deal quicker and more accurately using our Rules of Thumb. What are some of our rules?


○ Cap Rates: What is a cap rate, and how do investors use them?
○ Cash on Cash Return: What is our return that we strive for? (hint: 10%)
○ Debt Coverage Ratio: What ratio does a bank look for when deciding whether to provide financing?
○ Management Fees: What are the going rates to manage a property


Once you learn the basic rules of thumb, you will become more confident in analyzing deals, going through the due diligence phase, and putting in offers that will land you deals. You will also learn how to manage your property more effectively.

Preview 14 pages
Introduction to Rules of Thumb For Multifamily Investing.
00:34
Loan to Value, the amount banks are willing to lend as a percentage of the total loan. As you will see, loan to value will differ on the type of deal you have and the amount of experience you bring to the table.
Loan to Value, learn what banks are willing to lend you.
02:17

Often misunderstood, cap rates are a widely used calculation in multifamily investing that measures the rate of return on your investment. Understanding how to properly use cap rates is vital to investing.

Cap Rates and how to measure the rate of return on your investments.
04:12

One of the most popular calculations in among multifamily investors to calculate their rate of return is Cash on Cash. In this lesson, Gino is going to teach you exactly how to us this calculation and why it's so important.

Cash on Cash, calculating your rate of return.
01:55

This is a very important metric that banks use to decide whether to finance your deal. Find out what the banks are looking for and see what Jake and Gino strive for. This formula will show you if your property is generating enough income to pay the mortgage and the bills.

Debt Service Coverage Ratio (DSCR) and how to best qualify for loan approval.
01:53
Do you know how much your expenses should be as a percent of your gross income? In this lesson, Gino is going to map the path for you to making certain you know the percentage of the gross income of your investments.
Percentage of Expense to Gross Income and knowing your numbers.
04:01

Capital Expenditure is one of those rules that many investors are confused by and tend to neglect. Let us show you how to calculate cap ex and give you examples why you need to set up a capital expenditure account. Don’t make the same mistake that Jake and I made, almost sidetracking our investing careers.

Capital Expenditures, how not to be caught with your pants down
04:13

Mortgage Points are often confused with origination points. So, what is a loan point and should you consider points when financing a property? We will discuss origination points and show you how to lower the origination fee on a loan.

Mortgage Points, the difference between discount and origination.
02:21

As far and Jake and Gino are concerned, knowing your management fees are among the most important elements of running a successful multifamily business. Knowing what management companies charge, and knowing if you should hire a management company or self-manage. We let you decide.

Management Fees, hiring companies and self managing.
07:35
Cash Flow is the REASON why anyone should be investing in real estate. We view capital appreciation as icing on the cake. Would you buy a business that is losing money? Neither would I, and you shouldn’t purchase a property that has negative cash flow.
Cash Flow, The reason why you should be investing in real estate.
02:37

GRM, also known as Gross Rent Multiplier is a quick calculation to estimate a property’s value. Although it is not a very accurate calculation, it shows us if the property is vastly under or over priced and leads us to analyze the property more in depth.

How to use the Gross Rent Multiplier(GRM) when investing in real estate property
01:17

A landlord hates to experience Vacancy Loss, but it is a value play to investors. We describe the benefits as well as the detriment of experiencing vacancy loss and the acceptable amount a landlord should tolerate.

Calculate your Vacancy Loss and learn your Acceptable Vacancy Rate
02:23
Due Diligence, two of the most important words to every investor, can be a confusing process to any novice investor. Seasoned investors often overlook small details, so we assembled a checklist to follow when performing due diligence prior to closing on a deal.
Due Diligence, the two most important words in investing, here's your checklist.
11:38
Jake and I often use the Rule of 72 to calculate how long it will take us to double our money with a certain investment. Conversely, we also use the formula to show us the rate of return we have to achieve if we want to double our money within a certain time period.
Rule of 72, estimate how long it will take to double your investment and ROR.
01:38

How to Hold your real estate is a critical Rule of Thumb, and investors vary widely on the type of entity they use. Some investors find it wise to hold real estate in their personal names, and we will show you the benefits of creating an LLC to protect yourself.

How to Hold, employing different entities for real estate and top preferences.
04:30
Insurance Expenses can vary widely from market to market. We will discuss the type of insurance every property owner should purchase, as well as the cost per unit to estimate when buying a property.
Insurance Expense, finding the right coverage for your investments.
02:29

Buy on Actuals is a mantra of Jake and Gino. This quick video will discuss what a pro-forma is, what it’s used for, and why you should not purchase a property with pro-forma numbers. ONLY use the actual performance of the property.

Buy on Actuals, properly using your pro-forma to buy at the "right" price.
01:54
Unit Mix, what every multifamily investor should look for when purchasing an apartment building. This is an often overlooked rule for beginner investors, and can seriously impede your cash flow and valuation of the property.
Understanding Unit Mix in an apartment complex.
03:11
Property Class is split up into four designations, and we will discuss the benefits, as well as the disadvantages of owning each type of class. Find out what our preferred class is, and why. If you want to sound like a pro, don’t skip this video.
Property Class, learning the pros and cons of each four.
05:28
In the Marketing lesson, find out what is working in today’s market to lease up your vacant apartments. Gone are the days of relying on print media. Learn how to reach a wider audience, and save time and money while leasing up.
Marketing, fill your vacancies, reach a larger audience and save a lot of dough.
03:27
Negotiation is a learnable skill in real estate. Most of us don’t realize that we are constantly negotiating for “things” in our life. Let us show you how to become a better negotiator and begin to create win-win scenarios so people will want to sell their deal to you.
Preview 10:52
Property Inspection, a process whereby you can actually save money by spending it. What does property inspection entail, and how do you pay an inspector? We will show you the importance of this team member and how you can use an inspection report to your benefit.
Property Inspection, protecting yourself and hiring the right inspectors.
03:25
What is a Repair Allowance, and do investors actually use it successfully? When we first asked for a repair allowance, the broker told us it would never work. We’ve heard that line before, and thankfully we stuck to our guns. You will see how to use one successfully to get cash back at closing to rehab your property.
Repair Allowance, getting cash back at closing to use on deferred maintenance.
02:37

This 20 question quiz will test your skills on your knowledge of the Rules Of Thumb necessary for investing in Multifamily Real Estate. Take your time, review all of the lessons in sequence and then attempt the ROT quiz.

Multifamily Rules Of Thumb Quiz
20 questions