We talk about two major multifamily deal types, the value play and the yield play.
The value play is a deal with huge upside value potential due to mismanagement and deferred maintenance. As a rule it does not cash flow right out of the blocks. In fact it may take 6 to 12 months before it really begins to make money on a cash flow basis. However, in 18 to 24 months, you may double your original investment or better. Yes, it eventually does cash flow, but you may have taken a $5,000,000 property and made it into a $7,000,000 property. That is a value play.
The yield play is much different and here is a home made video from some of the members that shows a yield play being done. A yield play cash flows from day 1 because there is no mismanagement and little to no deferred maintenance. It is a well run, easy to transition deal.
Watch this video to understand the yield play but make sure you watch it all the way thru because the owner explains how he over came all of his fears about doing the deal with the help of his mentors at Lifestyles Unlimited.