{"id":8151,"date":"2018-02-07T11:11:40","date_gmt":"2018-02-07T19:11:40","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=8151"},"modified":"2018-01-31T16:30:34","modified_gmt":"2018-02-01T00:30:34","slug":"how-to-buy-the-first-apartment-building","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/02\/how-to-buy-the-first-apartment-building\/","title":{"rendered":"How to Buy the First Apartment Building"},"content":{"rendered":"

While buying a single-family home might sound like a good idea because you don\u2019t need too much cash for a down, it\u2019s awfully risky. Why? Well, if and when your tenant leaves, so does your cash flow. When it comes to property management, I like the diversification and that comes with a multi-unit or apartment property. One bad apple won\u2019t sour the entire bushel.<\/p>\n

So, how do you make the leap to owning a real apartment building? It may seem daunting since it\u2019s more expensive and the management burden is greater, but here are five tips to get you on your way :<\/p>\n

1. Do your homework \u2013<\/strong> People live in apartment buildings for a reason. It\u2019s close to work, it matches a financial need (either budget or luxury), or it\u2019s near entertainment or other desirable activities. Make sure you can answer the question \u201cWhy do people live here?\u201d so that there\u2019s still a reason to live in your building should a recession, company relocation, or other event happen in your community.<\/p>\n

2. Make friends with your banker \u2013<\/strong> Unlike a single-family home, it\u2019s difficult to find 80%+ financing for apartment buildings. It exists, but it\u2019s not for the faint of heart. The best way to position yourself to find debt that works for you and your building is to network with your local real estate banker. If you\u2019re honest with them, you\u2019ll know your parameters and they\u2019ll become your trusted partner.<\/p>\n

3. Keep an eye on your broker \u2013<\/strong> I like apartment brokers, I really do, but be careful. Not only are the numbers in their investment packages never correct, they still only get paid to sell you something. Trust but verify.<\/p>\n

4. Let someone else manage it \u2013<\/strong> No property manager will ever operate your building like you would. However, your time is far too valuable to deal with the dreaded stopped up toilet or to go on numerous leasing tours. Plus, in apartments, the fee that property managers charge is much less than the single-family home industry.<\/p>\n

5. You must believe \u2013<\/strong> The hardest part of the move to apartment ownership is finding equity. For those of us who didn\u2019t receive a large inheritance from a distant relative, where does one start? Hopefully you\u2019ve saved up a decent amount to get started. No potential investor wants to invest with a sponsor who isn\u2019t willing to \u201ceat his own cooking\u201d. If you\u2019ve found a compelling deal that you believe in 100% and are willing to put a meaningful personal investment in, you\u2019ll find others willing to do the same.<\/p>\n

Protecting and growing your cash flow is the way to move forward in real estate investing and apartments are the best way to accomplish that.<\/p>\n

Also, it\u2019s okay to start small. Finding a 5-unit property is much better than one single family home. Having 5 times the diversification will show you the ropes in multi-unit investing and you\u2019ll want to parlay that into a 10, 20, or 100 building in the future.<\/p>\n

How to Buy Your First Apartment Property<\/a> by Brian Milovich | Realty Biz News<\/p>\n","protected":false},"excerpt":{"rendered":"

While buying a single-family home might sound like a good idea because you don\u2019t need too much cash for a down, it\u2019s awfully risky. Why? 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