Workload on 10-20 apartments building

[Christian Rangel]

Hey guys,

I’m looking into purchasing 10 to 20 apartment building, is there really much difference between them on work to be done ?? Or really 10 or 20 is mostly the same work. Would you guys consider a rehab or turnkey property?

Thanks

[Account Closed]

When the numbers work like they should, you will make more than double the profit with a 20-unit because when you raise the rents every year by even a small amount like $30 per month per unit you make a ton of money when you do the math with the Gross Multiplier.

Suppose, your 20-unit property is in an area and in condition where the Gross Multiplier is 18. When you increase the rents for the 20 units you immediately increase the value of the building e.g. 20 x $30 = $600 per month additional income X 12 months = $7200 per year X GM 18 = $129,000 the amount you just increased the value of the building plus the additional $7200 per year = a total profit the first year = $129,000 + $7200 = $132,200 + the cashflow you was already earning and I will guess it was $200 per month for each unit = = $4,000 per month x 12 months = $48,000 per year. Add this to your $132,200 + $48,000 = $180,200 profit you made your first year.

If you raise the rents $60 instead of $30 I am not going to do the math, but you will probably make a profit of more than $300,000 your first year.

Sorry, all this did not answer your question! I own several apartment buildings. Some have 11 units, 14, 24, 28, 60 and it takes about the same amount if time to manage each building. I would rather go to the 60-unit building and have three times the maintenance because the 60-unit building is like owning a gold mine and when you have already done the math you have that great feeling and you know by doing the math that any amount of maintenance is insignificant. Most maintenance problems are resolved within minutes, a few hours, or even a few days and the more you handle at one property the less you have to travel to properties with less units.

We often go to our 60-unit building and 5 to 10 tenants come of of their apartments to tell us about maintenance issues, but don't forget that you make great profits from every one of those tenants.

I put in two images showing approximate profits for a 20 unit building if you raise the rents only $30 to $40 per year. Your question needs to be about what properties give you the most profit and not about the insignificant difference concerning the amount of time and labor in regards to larger or smaller properties.

As for turnkey properties, that is a huge subject and don't ever trust someone else to do your math or manage your properties.