Duplex, Triplex--Quick way to build your Real Estate Portfolio

Think outside the box! A smart investment strategy for those who are open to less traditional housing scenarios is purchasing a multi-unit property (ie. duplex or triplex) and living in one unit. This is great way to get a feel for being a landlord and property manager while keeping a watchful eye over your tenant(s). There are some great properties out there in places like Palo Alto, Mountain View, Sunnyvale, San Mateo and San Francisco that are a bargain right now. Pricing is similar to, or lower than single family homes. Also, rental markets are strong so your tenants can definitely help pay the mortgage. One could even enjoy a little "vacay" for being a smart investor and saving some cash over time. Better yet...buy another house!

Forget about competing against everyone looking for the single family bargain. Time to go after a buyers market that's not saturated! well...at least for now...

Downtown San Jose Tri-Plex Under $350K!! Seriously?

I just came across this 3-plex that would make a great rental. Walking distance from San Jose State University and close to shopping and restaurants and KFC--a college fave! I remember my college days living with the girls in a house just like this! I couldn't believe it when I saw the price of $340,900. Downtown San Jose is on Clearance right now!! Blue Light special on 12th street!!! All 3 units are fully occupied bringing in $3170 per month. Time for me to crunch the numbers! For more information click here! http://tinyurl.com/demf6u

What is Debt Service Coverage Ratio or DSCR

When investing and negotiating multi-residential investment properties, you will hear the term Debt Service Coverage Ratio or DSCR from banks and lenders. Ideally they will be looking for a ratio over 1, which means that the property is generating enough income to cover all debt obligations.

In general, it is calculated by:


Lately we have been running across lenders looking for a 1.2 ratio or above to protect themselves with a little padding. This means they would like to see debt coverage of 120% or more if possible. Therfore, if you are planning on investing in multi-residential investment properties get ready to pony up the cash to cover your debts and then some! For more information on financial analysis of investment properties feel free to contact me directly!