New to Apartments, Need your wise counsel

[Joel C.]

I have a duplex with about $150k in equity that I'm thinking about doing a 1031 to buy a small apartment complex (around 20 units). I don't have one in mind right now and honestly I don't have a market in mind. I'm open to any markets. Here are my questions:

1. Should I use a broker since it's my first time investing in apartments?
2. What is the minimum positive cash flow you like to have per unit?
3. Is it bad that I'm looking in all markets, just looking for a good deal?

Any advise on how to start, who to contact, and anything else I should know but don't know to ask would be a great help.

Thanks.

Joel

[Joel Owens]

1. YES but the broker should be well versed in multifamily and also an investor themselves so they provide more value than just filling out forms. 

2. Many investors will list 100 a door per month as a target minimum. The key is to decide if you want mainly cash flow,appreciation, or a mix of both. Some areas do not appreciate hardly at all but the rent grows year over year.

3. WHAT is a good deal? I have talked to thousands of investors over the years and what makes a good deal varies by people's life circumstances, capital to work with, and expected yields. 

Someone making 50k a year trying to quit a job that is younger might care more about higher cash flow at all costs to escape the rat race.

Another investor doing estate planning in their 60's or 70's might want  less yield for a higher quality asset so that they can relax in the golden years.