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All Forum Posts by: Kelly Rastatter

Kelly Rastatter has started 30 posts and replied 141 times.

Post: Can a Small-Mid Sized Apartment Complex Really be my FIRST Deal?

Kelly Rastatter
Pro Member
Posted
  • Investor
  • Chattanooga, TN
  • Posts 149
  • Votes 135

I've listened to most of the Podcasts, read hours and hours on BP, several books, etc. I am not broke and do have a little money saved up (about $16K total not including my 401K).

So far, my favorite strategy is buy and hold smaller (preferably 10 to 75 unit) apartment complexes for cash flow. Obviously, my little $16K is not going to go far in this arena no matter the market. I would rather keep that savings for covering whatever newbie-tax I will surely owe very soon. I understand that to get hard money or even commercial bank money for this big of a deal would require me to prove my expertise in this first. I haven't done a deal yet although I do own my home. It has about $30K in gross equity putting me at about 77% LTV on my FHA. I cannot sell for another 3 years due to using THDA. Since I make far more income now, I would have to pay back the down payment they gave me if I sell in less than 7 years. Also, we are in the middle of a project that is not yet up to code so an inspector is not yet my friend.

Here's the question: How do I get from here (no experience and little cash) to owning my first apartment complex that cash flows?

1. Partner for the down payment on a commercial loan.

2. Partner for the down payment on hard money.

3. Start with a small multi flip using hard money (or a combination of my money and hard money) and then trade up to bigger multis (1031 or carry over the note) until I reach the kind of cash that the bank or lender would consider as enough skin in the game to lend me the rest.

4. Other? What am I not seeing as an option? For those who have apartments in this size, how did you get the first one?