New to Apartments... Where to Start?

[Joel C.]

So I'm looking to sell one of my investment properties that has about $200k in equity in it and roll that into an apartment building. I've never invested in apartments (I've been doing SFH and duplexes for years) so I don't know where to begin. Here are a few questions I'd love some input on.

1. Should I look at partnering with someone first or go ahead and buy my first apartment?

2. I typically like to buy/hold to maximize cashflow over time, while at the same time adding value/equity to the property so i increase overall value. Is it possible to hold an apartment complex like a SFH for 20+ years for cashflow?

3. Are there any good syndicators I could partner with to gain experience?

4. How would I go about financing the purchase? Is it similar in the sense that I put up 25% and get a loan for the remaining 75%. I've heard about 5/1 ARM and other types of loans, would these be the best loans for a long-term buy/hold strategy.

5. Is a buy/hold long-term strategy the best for apartment buildings?

Thanks for y'alls help.

Joel

[Alina Trigub]

@Joel C.

I think you should decide what your long term RE goals and how to best achieve them. In terms of your questions,

1) Prior to partnering, decide on the property size and see if you can take it on yourself

2) It is possible, but uncommon to do so via syndications. Mostly done individually or via JVs

3) To partner with a syndicator, you'd need to bring something of value to them to the table. Think about what you have and whether they need it. To reiterate my point from #2 above - their strategies may not align with yours, so weigh on that first!

4) Terms vary, so reach out to commercial lenders to get a better terms sense.

5) Absolutely. 

Keep in mind, education is really the key here. Start by reading David Lindahl and Steve Berges books on multifamily.