New To Multi Familys

[Brandon Trafford]

Hey Everyone,

I've been listening to various BP Podcasts and reading a lot of forums about multi family and apartment complex investing but I know that you guys answering my questions will most likely lead me to my most accurate results.

I am a new investor seeking to get into commercial real estate. I have always been drawn toward multi family and apartment complex lots. I found a decent property in my area that I am interested in purchasing. I think its a good buy but I don't know what to look for in regards to what makes it a good buy or whether or not I'm walking into a building full of red flags. 

This being said, what do you guys recommend I look for as strong assets  in the building and what red flags should I be watching out for? I know the building has already been de-leaded thus it would pass a lead test.

Thanks!

Brandon

[Daniel Kenney]

Hey @Brandon Trafford. Congrats on taking action! However, before jumping into a deal, I strongly recommend you take some time to educate yourself on apartment deal analysis and due diligence (plenty of decent books out there to give you a decent foundation - The Ultimate Guide to Buying and Selling Apartments by Berges is one of the better ones IMO). The world of commercial apartment investing is a bit more complex than SFH or small multi-family investing, and there's typically more capital at stake. Before spending any significant time on physical due diligence, does the deal make sense from a financial standpoint? Have your reviewed historical financials, rent roll, etc.? Do you know what sort of financing you will likely be able to get and how that will impact the deal? Do you have or will you be able to source sufficient equity? There are more bad multifamily deals out there than good ones, which is why it makes sense to evaluate deals financially first. Only if it passes your financial criteria should you move into more in-depth analysis. You could also look into finding someone in your area who is more experienced and can help you evaluate whether it is a deal worth exploring. Hope that helps!

@Brandon Trafford