Apartment Buildings !!!

[Omari Heflin]

Hey BP Family I will  be investing into apartments in the near future. What do you guys recommend is the best way to buy an apartment building ? What are the main things you look for when forcing appreciation in a property ? If your using a bank how much do you have to put down ? What’s the best way to raise capital for your investment ? 

I know this is long but your input is appreciated , Thanks 

[James Kojo]

@Omari Heflin

Hey there!

I hope you don't find this post discouraging, but the answer to each one of your questions could probably fill a book, or at least a respectable white-paper. You'll probably get more value from the forums if you can narrow down your questions to be more specific.

Perhaps you should back-up, and start thinking about a strategy on how to eat this particular elephant (i.e. your MFR education.)

Start by reading at least 1 primer book cover-to-cover, if you haven't already. I like Brandon's book on apartment investing, but there are many others. You can find a good list here. 

After that, There are a ton of free/cheap resources. Books, podcasts, forums, meetups, etc. Those are kind-of givens. You should be doing those regularly throughout your journey. 

But to really learn how it's done, I'd highly recommend you find mentors or advisors to help you while you're doing it. Most people use BP forums to fill that role, and I think that's great, but finding someone you know who you can talk to and trust on a regular basis is better.

But just so you don't feel cheated by my post, here are my (totally inadequate) answers to your questions.

What do you guys recommend is the best way to buy an apartment building ?

- Build relationships with good commercial brokers in your target markets. they have all the deals.

What are the main things you look for when forcing appreciation in a property ? 

- Opportunities for increase rent, and decreasing expenses. Specifically, below market rents due to inferior cosmetic issues (floors, counters, appliance, paint, cabinets, etc.) Look for waste in utility usage or repairs costs due to old/outdated mechanicals.

If your using a bank how much do you have to put down ? 

- The minimum that the bank requires. usually around 25% for an easy deal. This can vary wildly.

What’s the best way to raise capital for your investment ? 

- If you make decent money, save some and deploy it when you have enough. Secondly, you can borrow money from friends/family. Thirdly, you can take money from outside investors (however, the laws around doing this are very strict, so make sure you know what you're doing.) Fourth, read Brandon's book on investing with low/no-money down. :)

Hope that helps!

James Kojo