Buy a duplex now or wait for a great apt opporunity?

Question

I'm in the process of buying my next property, which happens to be a duplex. But I'm starting to think I should hold off because I really want to buy an apartment building. However, the thing is I don't have $250k to put down on a $1 mill apt complex. But I do have the down payment for a duplex. I've never partnered up with anyone and I've never done a syndication deal. I'm doing research on these matters right now.

Should I just buy this duplex and then go after an apt complex on the next deal or should I go after an apt building right now?

Account Closed · Answer

"A bird in the hand is worth 2 in the bush."

The universe deliveries us opportunities everyday.  If you have an opportunity that works, take it.  You are not guaranteed anything tomorrow.

Gulliver R. · Answer

@Alina T. @Dustin Hawks @Kai Kopsch @Jeff Kehl Thomas S.

You all make a lot of sense when you advise to go with the duplex now and at the same time or later on do an apt deal. I will most likely buy the duplex. That will put me at 4 units.

As far as an apt deal I need to get educated on syndications and partnerships because I individually don't have the capital to put down 25-30% down on a $800k-$12mill apt building.

Thanks everyone!

Jake Thompson · Answer

I think it is easier to start small and build. It's not necessary, but I think it's easier. You can start small and snowball profits into larger and larger properties. It might take you 5 years to save up for a 50 unit apartment, but if you can save for a duplex in 6 months, then it takes you 4 months to buy your next one, then 6 months to buy a 5 unit, and so on and so on until you can 1031 exchange and/or use the excess cash flow to buy that 50 unit (or whatever size you're looking at) which might very well be in 3 years instead.

Thomas S. · Answer

How much closer to purchasing an apartment does buying a duplex now get you. Obviously it pushes it off even farther in the future. If you continue on that path you will never buy an apartment. You need to decide your future path now rather than continually making decisions in the moment.

Apartment or duplexes.

Jeff Kehl · Answer

@Gulliver R. Why not do both? Buy the duplex and if you find an apartment building that works syndicate it. I did a lot of training and research on multifamily syndication but have not found a property where the numbers look particularly appealing to me so I continue to just buy smaller properties. But I'm ready to go if an opportunity to buy a larger property should come up.

Alina Trigub · Answer

@Gulliver R.

You said it well yourself: always moving forward is essential!

I also completely agree with @Mark Poulton - grab the opportunity that's there for you today! You'll do more tomorrow. In the meantime, you'll build your credit history, establish business relationship with lenders, insurance rep, maybe some contractors, and other business partners along the way. On the top of it, you will have the property cash flow for you. Maybe it's little money, but still MUCH better than nothing! Good luck!

Gulliver R. · Answer

great quote @Mark Poulton to put into perspective. Jennifer Z. I may do the trade 5 properties in for an apartment building (Robert K method) and also thinking about getting a partnership going to get a few apt complexes. I want to talk with some movers and shakers and get their advice. But I guess moving forward is better than standing still, right?

Sam Shueh · Answer

Possibly use the equity to trade up.

David Faulkner · Answer

One thing to consider ... if you want to syndicate an apartment deal, the first thing most investors will ask you and look for is what is your track record investing. How do you get a track record? Either by building up with individually held duplexes, fourplexes, etc. and/or by talking another syndicator into allowing you to "ride shotgun" on a deal to help them find and manage it, and likely investing some of your own capital into the deal as well. Not sure what your current investment track record is or if it is sufficient or not to syndicate. This is mostly just an illustrative example of the need to start with the desired end, and work your way backwards to form your plan ... if duplexes appear in that plan, then great. If duplexes lead you to a better plan or a better end goal, then great. Otherwise, if buying a duplex does not help you achieve your ultimate goal in an efficient and effective manner, then don't buy one.

Buy a duplex now or wait for a great apt opporunity?

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