Posted by Brent_IL on November 15, 2000 at 23:56:11:
The tired owner of an apartment building may be very open to CRE offers. In particular, low down w/ seller-held second. For the most part they are not novices with regard to cash flow, and will desire to keep their own at a high level. Phil is right that it is solely your responsibility is to make sure the net income will cover ALL expenses and contingencies including management (higher legal, too). It’s easy to buy an apartment building on contract, but it’s harder to guarantee a first year positive cash flow. I don’t want to sound negative. When I first started making offers on multi-res buildings I thought the sellers were slow-minded and that I had all the answers because my state-of-the-art calculator showed me the way to the shining light of profit. From these not so slow-minded sellers, I learned that a calculator couldn?t produce money to pay bills. Neither can it evict a non-paying tenant, who is outside of my 7% vacancy factor and refuses to get with the program and move to the paying side. Sorry about the ramble. Check out the commercial board for posts from people that do this all the time. Verify the numbers.
How do people go about buying apartment buildings? Is it possible to buy them with a hard money loan? Or do people usually save their own money for a down payment or something like that?
In other words, what I’m asking is, is buying apartment buildings mainly for the more advanced investors? Or can someone that isn’t as experienced buy one?
My area has a lot of apartment buildings, and they are constantly building more. Getting the apartments occupied isn’t a big concern.
My father rents a condo around here and he put an ad it the paper when he was trying to rent it out. He told me he got around 15 or 20 calls the first day.
I would like to get into buying apartment buildings and I just want to know if I need to wait like 5 or 10 years before doing that or if I can just jump in if I get a hard money loan for the down payment.
Re: Purchasing Apartment Buildings - Posted by phil fernandez
Posted by phil fernandez on November 15, 2000 at 21:34:42:
A hard money loan may not be what you need here. What you need is an apartment owner that is tired of being a landlord and is motivated enough to offer terms to you so that you can buy his property. Let him owner finance you.
I would not wait 5 or 10 years as you ask. The sooner you buy, the sooner you benefit through cashflow, equity buildup and appreciation. But make sure you verify all income and expense numbers. The idea is to make a profit. Good luck.