Is it profitable to buy real estate that needs no improvement?

[Ben Feder]

What if you decide to buy an apartment building that's already profitable, running fine, structurally and cosmetically up to date, and has good management? If you buy that type of apartment, or any other type of real estate for that matter, and it is already in good working order and a class "A" or "B" asset nothing really wrong with it, could I just take that and continue renting it out with the current management company, collect rents, and make good cash flow from the deal? Or does most profit come from fixing up real estate, improving profitability, etc.?

[Mary M.]

I buy new builds. In the commercial multifamily world price is all about cash flow (and location).  For example, where I live the cap rates range from 4-6%.  This means if you bought with cash you would get 4-6% return each year 

It really depends on what your goals are, how much time you have, how much cash, etc etc. New Builds are more like bonds in that you are buying an income stream. This type of investment works best IMO for those with the ability to come in with a large amount of cash and if you leverage you are basically earning the split between CAP rate and interest rate and your cash flow will be slimmer until you can increase rents over time

So really it just depends. Just keep doing what you are doing - fact find and keep learning and you will find what will work best for your situation.