Investing in Multi-Unit Apartment Buildings
Filed under: Home Buying, Multi-Units
Perhaps the most rewarding real estate opportunities available at the present time consist of multi-unit dwellings in undeveloped neighborhoods. I think it is best to buy an apartment building with no more than four units, because this number of units, or fewer, generally keeps a building from becoming subject to complex city regulations. Needless to say, you ought to check highly variable local regulations on these and related matters before making an offer.
Before you bother looking in a neighborhood, find out whether it is on its way up or down. Experienced local real estate agents can give you good advice on this. Whether you will occupy an apartment in the building yourself should also influence your decision. Lenders tend to have more confidence in buildings that are owner occupied.
Most people who consider buying such a building worry about how they would collect the rents. In my experience, this has never
been a problem. When they are provided with a post office box address, the vast majority of tenants simply mail in their rent every
month. I think the clashing lifestyles of tenants in a building are a much greater potential problem. For example, people who frequently party or play loud music into the early hours may be fun to meet, but hell to live next door to. Finding people to live amicably in proximity to other people is not as easy as it may sound. That demure couple with old-fashioned, good manners can reveal other aspects of their personalities after becoming your tenants. “How could you have rented to them?” your other tenants may ask in anger and dismay. They don’t want to hear that we all make mistakes. Your problems in this, and similar cases, are likely be with other tenants rather than the troublemakers themselves, who may turn out to be more or less oblivious of their wrongdoing. Many of the things I’ve said in my book, Bubble Proof, about screening tenants apply here as well. Additionally, you may also decide to hire a professional property management company, as discussed in the last chapter of my book, Bubble Proof.
In some cities, you may be offered 100 percent financing with no down payment to buy a multi-unit dwelling. The catch is that the
building must be in a particular low-income neighborhood and must be below a certain price. You are not getting something for
nothing. Essentially you are being offered a building worth up to perhaps $400,000 in exchange for your management skills, optimism and belief in the community. You will earn ownership of the building in other ways than exchanging money for it. For someone with the energy, perseverance and courage, this can be a life-changing opportunity.
You will find a lot of useful information on multi-unit investing and how to buy property with little or no money down in my CD, The Real Estate Millionaire Mindset: Multi-Unit Investing & Creative Real Estate Investing.
Regarless of the type of real estate investing you are considering doing. Based on my 6 years of investing experience, people who are educated in the investing process and understand investing strategies are the most successful. I came across some free investment strategy videos and this ebook that I thought would be cool to share with everyone. You can download it at www.SamBell3rd.com . Happy investing and I hope this resource is a benefit for you.
March 6th, 2008 at 12:40 pm | #