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Updated over 5 years ago on . Most recent reply
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Apartment Investing Rookie
So, I've been working on saving for an investment property (1st one) and along comes an opportunity to buy an apartment building (6 units; $130k). It needs a lot of work, but it is fully occupied with long-term tenants because the rent is so low. The owner told me he has not done much to maintain the place hence the rents being so low. So as I'm mulling over whether to go for it, it dawns on me: I could sell my house, take the equity and buy a nicer apartment building which creates more NOI and /or one that is better managed. This would obviously give me a big boost in my cash to get going in REI.
But being a rookie (and having a family of 6), maybe going a little smaller might be better?
What do you think?
Most Popular Reply
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there is definitely potential for value-add. Rents on these apartments if fixed up are easily doubled. There is a property management firm nearby that would probably do a good job with it. They cash flow as-is, but due to them not being maintained there are a lot of updates that are needed just to comply with Texas Property Code (safety issues, etc.). I am potentially partnering with someone who has a little experience with REI and possibly extra cash to help with some rehab work. The owner will not budge on price.
My thinking was that I have about $70k in equity that I could use to buy a different complex in better shape and better managed and would provide quicker NOI. The 6 unit would be about 5 years till all 6 units are fixed up and rents are fully raised to market value. I don't think I want to sell my house to rehab the apartments.