Getting Started with Real Estate/Apartment Investing

[Raheim H.]

Hello everyone,

I would like to get started with apartment investing. I'm a 18 year old college student who would like to get up and running in the real estate business. I have never dealt with any type of real estate before so some might think that jumping right into apartment buildings would be a bad idea. I've done some research on the process of buying apartment buildings but the information I found was very vague and unclear. There are a lot of topics I did not understand. Since I'm just getting started with the research I'm a bit overwhelmed. I have so many questions and was not able to locate answers.


Questions Like:

1. Can I get pre-approved from a bank/lender before going out and looking for an apartment building?

2. Can I buy an apartment building with no money down?

3. Can a person as young as I am invest in real estate and get adequate financing?

4. How does refinancing work?

The list goes on and on and I don't really know where to begin.



Can someone please explain exactly how the process of buying an apartment building works and how to go about it?

Any help would be appreciated.

Thanks

[Joe Fairless]

@Raheim H.  welcome to BP and congrats on getting started. 

1. Apts buildings that are 5+ units are evaluated by lenders based on the income they generate. While you can give the lender some paperwork on yourself prior to finding a property, they are mostly interested in the property itself. You or your biz partners will also need to qualify from an income and cash reserves standpoint. 

2. Yes but it's very difficult to find. Essentially you'd need to do some sort of creative financing where you have a motivated seller who is willing to give you control of the property with $0 of your own money in it. It's possible but not likely. 

3. Age isn't relevant but experience and financial strength is. You'll want to talk to a couple local lenders and ask what it would take to qualify for a mortgage on XYZ size of property. Then, start finding the people who can be on your team who fit that profile. 

4. You have a property that is currently financed then you decide to finance it again. It will be appraised and, depending on the lender, property's cash situation and new appraised value, you might be able to get cash back out after closing.

I recommend reading The Complete Guide to Buying and Selling Apartments by Steve Berges. It's a good book for beginners.