Sacramento, California real estate investor Sara Jung, owner and property acquisition manager of Legacy Equities, LLC, says many Americans have the misconception that commercial real estate investing is just for the big guys. “Once we start talking and I find out a little bit more about the client’s story and what they’re looking for,” says Jung, “we find that there are a lot of opportunities for them to participate.”
Jung was recently featured on the Business Innovators Radio Podcast, using her 17 years of real estate expertise to answer common investor questions regarding multi-unit real estate investing. Unlike owning a single-unit investment property like a rental house, multi-unit investments can range from five to upwards of 500 units or more.
“If you have your tenant leave a single-family home, you’re stuck with that mortgage payment and you have to scurry around to find somebody else to fill the vacancy,” Jung says. “Then maybe you have some capital expenses that come up, like you have to replace the roof or fix some unexpected things, and you only have one tenant to pay for it – the one that just moved out.”
That’s not the case for multi-unit investments, according to Jung, “With multi-family properties, you have 50 or 100 tenants paying those expenses – sharing the cost of repairs and maintenance overall.” she says. “So, it’s a safer place to be, because you can distribute the risk across multiple tenant income streams.”
Now is an excellent time to begin investing in multi-unit properties, according to Mashvisor.com. The real estate data analysis company says the multi-family market looks like it’s shifting from a seller’s market to a buyer’s market, and while interest rates are expected to rise throughout the rest of the year, they say that buyers searching for multi-family buildings can secure these assets at a more balanced price to account for rising interest rates.
Jung, who was named in the top 1% of mortgage originators in the country in 2018, also explains that you don’t need to have millions in the bank to move into the world of multi-unit commercial investments.
“A lot of people think they have to have cash to be able to invest, and that’s actually not the case,” she explains. “There are specific 401(k) and IRA funds that can be rolled over; they allow people to invest in real estate and benefit from everything else that comes along with it.”
Even those without easily-accessible cash will find it easier than they think to achieve residual income from multi-unit properties, says Jung.
“When you get a residential mortgage loan, the lender is looking at your credit, your income, and if you pay your bills on time,” she says. “When you get a commercial loan for a multi-unit building, they’re not looking at you per se — they’re looking at the potential income from the investment property. It’s actually easier to get a loan to finance a multi-unit building.”
Jung also encourages would-be investors to examine teaming up with a company such as Legacy Equities to become a limited investor, in which risk is shared between multiple investors. “It’s a legal process for us to pool investors’ money together to purchase and acquire a piece of real estate,” she says. “The limited investor is the person who’s going to invest a dollar amount into the deal and they’ll basically sit back, let all of the general partners do all of the work, and they collect a paycheck.”
Jung says her ultimate goal is to help people help themselves. “What I noticed was a lot of my clients really didn’t have what they would need to retire or build up funds for a rainy day,” she says. “One of the passions that I have is helping people figure out ways to invest properly. I understand there are a lot of ways you can get residual income, but real estate is a physical asset that you can invest in and get regular cash flow from — it helps pay for itself.”
About Legacy Equities LLC: Based out of Northern California, Legacy Equities offers investment opportunities to investors who are seeking to improve their returns on their investments or diversify their portfolio. Owner and Property Acquisition Manager Sara Jung has counseled hundreds of individuals over the years on various aspects of real estate investing and how to use financing as a tool for building wealth. For more information about Legacy Equities LLC, see their website at PassiveInvestmentPartners.com.
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