How to invest in an apartment building? Are you ready to take your real estate
investing to the next level and get more bang for your buck by
getting apartment buildings instead of buying properties one by one?
Well, boy, are you smart. I'm going to tell you exactly how you do it
so that you don't make any mistake. Let's go.
I'm going to tell you the real process to buying an apartment building step by
step so you know exactly what to expect and exactly what to do.
No mistakes. I'm going to share with you some secret tips so you know if you have
a good deal if this is an apartment building you should be investing in or
one that you should walk away from. And last but not least, I'm going to
share with you my big secret that I discovered just a few years ago and how
I went from 6 figures all the way to millionaire status with
real estate. So, the great thing about real estate
investing is how many different ways there are for you to make money.
So, when it comes to real estate investing, one of the things that you
have to know is that you have to start thinking differently.
You do not need to think like a regular person thinks about real estate.
When it comes to real estate, most people start looking at what school district it
is in and how many bedrooms it has and all of
these other things if it has stainless steel appliances.
And all of these wonderful things that we love. But mostly stuff that we found
on HGTV that really has nothing to do with
making money. When it comes to real estate investing, we are talking about
how to make money with real estate. We
basically see real estate just as a commodity that we can make money on.
You either want to take your rental properties and rent them out and get
cash flow income. Or you want to fix and flip properties
whether it be single family homes or apartment buildings. Again,
you want to improve them and make more money off of them and then sell them for
a profit. Or you want to keep properties for a
little bit some buy in holes. Let them go up in value and then eventually sell
them. So, whatever it is that you are wanting
to do in real estate, you need to start thinking like a real
estate investor. Stop looking and thinking about all of
the things that they teach you on TV and start thinking, "Okay, how can I make
money with real estate." And one of the best things and the
smartest things that you already seem to know
is that you need to start looking at apartment buildings. So, let's talk about
that. So, when it comes to real estate
investing, we have different types of properties.
We have single-family residences which are just homes that only one family can
live in. Mostly one units. You know, condos or houses.
Whether they be attached or detached. A detached is just a single-family home
that sits by itself or an attached home is like a townhouse or a
row home. So, there's different types of residencies but we want to now talk
about multi-units. When you're talking about
investing in apartments, you want multi-units. You can either do a
residential type of unit like a 2 to 4 unit which is a 2 unit, a duplex
or a 3 unit or 4 unit. And those are a lot easier to get if
you're a first time home buyer. But if we're actually talking about an
apartment building, we're talking about commercial
residential real estate. And that is going to consist of 5
units and more. So, when it comes to commercial real estate and apartment
buildings, you need to think differently. You're not
going to be able to get traditional financing or traditional mortgage like
you would with a 1 to 4 unit. Once you move into the realm of 5
units and up, you will need a commercial lender in order to finance those
properties. And those properties have a different
process on how you will go about managing them.
And even how you will purchase them. So let me tell you that part.
So, when it comes to buying apartment buildings, one of the things that I have
found (And i'll tell you my story really quickly)
is that they can be way more profitable. So, when I started investing in real
estate, I really focused on single-family homes.
Literally, when i quit my job and I was able to invest in real estate full-time,
I had amassed a portfolio of single-family homes of over 40 homes.
And it was providing me a very good rental income. I was getting well over
two hundred thousand dollars a year just for my rental properties. But like I
said, I needed 40 properties just to get to that number.
Additionally, because they were single family homes, I had a property manager
for each of them. I had an electric bill for each of them, I had a utility bills.
Like every single property had its own taxes,
it had his own insurance. There were a lot of expenses tied to
each home because they were single family residences.
But when i started to graduate and say, "Okay, I want to do things bigger." And I
started going into multi-units. Of course, I started with some
multi-units like 2 to 4 units. But then when i got to small apartment
buildings like 8 units, 10 units, 12 units.
I found that they were way more profitable.
And that is because I would only have one tax bill, 1 insurance bill,
one property manager taking care of that one property.
Instead of having all of my units all spread out and having all of those
expenses for every single unit, I was able to now consolidate and have
every expense at that one place and then that one place was providing me
lots of rental income. Additionally, if you just have one house
and the tenant moves out, now you have no income coming from that
house. But if you have an apartment building, let's just use a round example
just say, you have a 10 unit apartment building
and one of the people moves out, you still are at a 90% occupancy.
Because 9 out of those 10 units are still filled up.
Additionally, this is a great way to work. You get to have less expenses all of
them consolidated in one place. And now, you only have to find tenants
for this one place so that helps so much more and it's more
profitable for you. So, now that i am investing in apartment
buildings, let me tell you what I look for.
I have a company called NUUREZ. N-U-U-R-E-Z, ".com". You actually can go to
our website and check us out if you want to.
But we are investing in properties that we can do short-term rentals on.
And one of our key things that we like to do is buy small apartment buildings.
That way we can actually diversify what type of tenants we have.
Using that same example, if we have a 10 unit, I don't have to make all 10 of
those units short-term rentals. I can make 5 of
them long-term rentals and I can make five of them short-term rentals.
That way, I have a different mix coming in and different levels of income coming
in. Obviously, the short-term rentals are a
little bit more profitable than your long-term rentals.
So, I find that that's a really great way to do things.
However with the short-term rentals, it requires different type of property
management, different type of cleaning companies to
come in and clean those properties. So, it is a little bit different to
manage. So, I'm able to get the best of both
worlds with my apartments by diversifying what type of tenants i will
do and what i do with those units. And you
can do the same thing. So, if you want, (again) go check out
nuurez.com. N-U-U-R-E-Z, ".com". But what I want you to
garner from this lesson is that apartment buildings offer you
different opportunities. You don't have to just take that
apartment building and do what they were already doing with it.
You literally can find ways to increase the rent and to turn some of those units
into short-term rentals if you know the county allows you to do
that. And you can make a lot more money. This is what I've done and this is how I
found that I'm able to improve my properties
faster, better, keep them better maintained and make even more money in
them. So, let me tell you some couple of things
that you need to look at before you buy anything. So, before you buy any apartment
building, you want to look at what they call the T12. That is your trailing
docks for the past 12 months for that apartment. You want to look at what
neighborhood it is in. Many times, apartment buildings will be
for sale and we grade them by class A B or C. C being the worst.
And I what I've noticed... And I'm so sorry but I have to be honest.
So, many new investors, they think that they have to only buy C grade
properties in the ghetto, in the worst areas. They feel like this is all that
they can afford, this is where they need to start.
And that is a big myth. You do not want to buy an apartment building in a low
performing area with high risk tenants. That's actually
the worst thing that you can do as a new investor.
You want to buy a solid property that can be fixed up or has already been
fixed up. One of the 2. Either you have the money
to improve it and you're going to build equity in that property.
Or the current owner has already fixed the property up and made it valuable and
you can just turn key. You can just go put your
tenants in it and start making money. You really want to only do one of those
2 things. But you don't want to go into a neighborhood where there's high-risk
tenants, where there's section 8 housing, where there's a lot of crime, where the
economics are bad. You want to start looking and buy properties that you can
afford, of course. Okay? I'm not saying you're
going to be able to go out and buy 100 unit buildings and things like that.
But do not just go for the first thing that you can afford. Don't set a low
budget and then get a crappy property. You want
to look at how well the property is performing before you
ever buy it. Look through the documents and see how
profitable is the property. What was the net income?
What are the average rents? Are they below market or above market?
In other words, when you take that property over, could you increase the
rents and make more money? Or all of the tenants in such a bad area
that that's all the rent that you can get.
You really want to look at some of these things and this is how you analyze an
apartment building. Because you don't want to buy someone
else's problem, okay? I know i told you before in other
videos that you want to be a problem solver.
But when it comes to buying an apartment building? No, no.
Only experienced investors should be buying apartment buildings.
So, only an experienced investor should be buying a good
property. An experienced investor does not want to buy somebody else's crap or
somebody else's problem. We only want to buy things if it's a
problem that we can solve and make money off of.
So, start to think about that. So, another great thing about apartment buildings
where you can get them very easily much different than a one to
4-unit is you can usually leverage seller
financing. So, because apartment buildings often
are seller finance, meaning the seller will either finance the property and
hold the mortgage or they will hold a second mortgage
where they basically gave you most of the down payment.
This is why it's a little bit easier to get apartments than it is sometimes
other properties. When you are looking for financing for apartment buildings,
they will look at how profitable the property is
more so than they will look at your own credit and experience.
That's the great thing. Because apartments are designed to make money in
their income producing asset, lenders and banks that land on apartment
buildings will look to make sure that that property
is profitable and it is a good investment for them and for you.
And coupled with the fact that you can get seller financing with the owner of
that building will give you money to buy it or
take a mortgage out for you where you just paid them directly. You can get
those properties for almost little to no money out of pocket
or you can borrow all of the money for the down payment. And that's completely
legal and they let you do it in the commercial residential world. But not in
the... You know, one to 4 unit world. So, great benefit there. And my last bonus
tip. Again, I could not end without sharing
this with you. The last bonus tip that you should do when investing in
apartment building is use business credit and use business
funding. So, if you have not already done so, please check out my
video on how to build business credit. I have
all this content where I'm teaching you how to do this. You literally can have
all of the business funding pay for and be the down payment
and the working capital for your apartment building. That way you
never have to worry about that property going into foreclosure or not being able
to fix something if it gets broken. Make sure that you go ahead and leverage
your business credit, get that established so you have those funds
available before you ever go buy an apartment
building. Okay. So, I have created an entire free
training that will teach you my complete formula on how to invest in
real estate, make big profits without losing money.
Check it out at noellesfreetraining.com. Again, that's noellesfreetraining.com. I
want to also ask you at this time to go ahead and like this video. Make sure you
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This is Noelle. To your success.