Apartment complex owners

[Max McGuirk]

Looking to get into purchasing an apartment complex. What is the best size? I would rather have an on-site property manager. I would rather have the property at least 75% occupied. I would like to get feedback on some things I wouldn’t necessarily know coming from a single family investment background.

[Brian Burke]

Thanks for the shout-out, @Ray Johnson.  80 units is somewhat of a grab-bag.  It really depends on where it is and what the rents are.  80 units in Beverly Hills or 80 units in Topeka Kansas are two completely different things.

80 units in lower-rent areas are a bit of a challenge.  Think of the career path of an on-site manager.  Entry level would be managing small properties and working their way up to larger properties as they gain experience.  This makes sense because the owner of an 80 unit can't afford to pay the same salary as the owner of a 500-unit.  And this really effects the quality of the candidate that you can attract, with the occasional exception.

But investors that don't have the capital, experience, or balance sheet to buy 500 units have to live within their means, so to speak.  For most of us, we worked our way up, buying 4-plexes and then a 10-20 unit, then 50-unit, then 100-unit and so on.  It's like a right of passage.  If you can survive the challenges of operating this "tweener" properties you'll be better prepared to survive and thrive as the size of your properties grow.  And once you get into the larger stuff, you never want to look back and do 80 unit deals again.