Advice for a first time apartment buyer

[Matt Mayotte]

Hey Everyone,

I've been a landlord and have remodeled my own single family (one duplex) properties for the past 8 years. I've had some hard lessons with bad tenants over the years but overall I am doing pretty good. In looking at the NOI and Cap rates of some apartment buildings available for sale right now I've decided to start selling my single family houses and jump into apartment buildings. I am thinking of starting with a 6-10 unit building depending on how much I can get financing for. So far from what I can tell the more units the higher the NOI in general. Also, I'm not interested in being a slumlord. I maintain my properties and want to make sure I'm having a positive impact in the neighborhoods where my properties are. Does anyone have any advice for me in how apartments differ from single family houses and duplexes? Are the tenants similar in their issues and how to deal with them? I generally try to buy properties that need some work for cheaper and then do the work myself to improve the equity and resale value. Is this a good strategy for apartments as well? Thanks for your advice!

[John Jacobus]

@Matt Mayotte Pursing value-add multi-family properties is a great approach to building wealth.  I've recommended a few resources below which provide additional context on a) the difference between multi-family and single family investment property b) value-add multi-family opportunities c) how investors got started in the value-add multi-family area.

Books:

1. What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures by Frank Gallinelli

2. Is This a Deal?: How to Analyze, Finance, and Manage a Multiplex by Ben Leybovich

3. The ABCs of Real Estate Investing by Ken McElroy

4. The Ultimate Guide to Buying Apartment Buildings by Michael Blank

5. Wheelbarrow Profits by Jake & Gino

Podcasts:

1.  Old Capital Real Estate Investing Podcast - Lots of good stories about newbie investors getting started with multi-family investing

2. Wheelbarrow Profits Podcast - While they have a variety of different guests, Jame and Gino have several interviews with individuals who have scaled quickly and achieved success in the multi-family arena.  The Jake & Gino personal story is also a great success story in the value-add multi-family area.

3.  Apartment Building Investing with Michael Blank - Same comments as Wheelbarrow Profits

4.  The Lifetime Cash Flow Through Real Estate Investing Podcast with Rod Khleif - He has many guests who tell their story of how they got stared with multi-family investing.  Rod also has extensive personal experience with and discusses the relative merits of single family vs. multi-family investments.