How much do I need to invest in an apartment building? To start

[Marx Jean]

How much do I need to start to invest in a apartment building?

[Arn Cenedella]

@Marx Jean

@Rick Martin asks a good question and the answer as it often is that “it depends”.

With $25,000 to $50,000; you could invest as a Limited Partner (LP) in a large scale apartment building.

If you want to go it alone, figure you will need 30% to 40% of the purchase price in cash. Probably 25% to 30% minimum down payment, another 5% for closing costs and then 10% for reserves. These numbers are just by way of example to give you an order of magnitude estimate.

Over my investing career about the only time I see investors get hurt is if they over leverage and under capitalize. Don’t go into the deal on a shoestring. Have cash sitting in the bank for when Murphy shows up as it almost always does. Let’s call your cash reserves your Sominex account so you can sleep at night knowing cash is there to help you survive any rough patches. Almost always something will come up, it’s not a question of if but rather when.

To be clear, I love real estate investing and it is a great way to achieve financial security and then freedom. One just needs to go about it in an informed realistic prudent way.

Good luck to you!