Are you ready to get your own apartment building?
There are definitely some hidden gems in the apartment building world. It’s a great place to start investing. But there are a few tricks that I need to tell you so that you don’t get all tripped up.
I’m going to explain to you the entire apartment buying process step by step so there are no surprises for you. So, apartment building investing is actually one of the big deals right now. There are so many people talking about it. But very few people actually doing it.
So, when it comes to apartment buildings, I actually was pretty late to the game. I actually started investing in real estate while I was still working my boring corporate job. I started investing in real estate in 2002, 2003. I actually made the worst mistake ever. Didn’t know what I was doing. And I lost everything in 2009 when the whole economy crashed. I ended up living back in my parent’s basement with my husband and my kids.
Broke, bankrupt, foreclosed, and pretty much a loser. So, I kind of turned that around by getting myself educated and I started investing in real estate. But I was investing in just single-family homes, okay? I have figured out how to start wholesaling then I started fixing and flipping. Then I got some rental properties and I got enough rental property income so that I could quit my boring corporate job and live the life that I wanted to live.
However, that was not the end of my story and I’m going to tell you the biggest mistake that I made was as I was you know investing in real estate and I have these great rental properties, I have all single-family homes, okay? In fact, at one point, I had over 40 of them. And so, this sounds amazing and the income was really good. But I’ll be really honest with you. It was a big hassle.
There was a lot of work in managing all those single-family homes. Remember, every single home has its own mortgage, its own taxes, on insurance, its own utility bills. Has to get the grass cut like there were just so many things that went along with each property. And so, as I’ve gotten in the past few years investing in apartment buildings and in multi-units, I cannot believe how late I was to the party and all of the benefits that I was missing out on. Like I said, for one, you don’t have to manage all of those properties individually and have expenses at all of those different properties.
The next thing, I realized that the risk of apartment buildings was actually lower than on single-family homes. For example, if I have a 10 unit and old and the units are not occupied. Or even 2 of the units are not occupied, that’s 20% not occupied and 80% occupied. But on my single-family homes when I had one property and the tenant wasn’t able to pay or they.
You know something happened, I had a 100% vacancy rate which is not good. That means 0% occupied. Zero income. And so, I realized really quickly that’s a problem in apartments. And apartment buildings have changed the game on that.
Additionally. Once you have apartment buildings, you can have one property manager managing that building. And it’s a lot easier than having multiple property managers managing multiple different properties all over. You know, one by one by one. And so, I just found that there were so many benefits to apartment buildings and I’m just so happy that you guys have stumbled across this because you are on the right track.
So, let me get to the meaty fun stuff of apartment buildings. So, since you are now trying to get your first rental property apartment building, you are definitely on the right track. But I’m going to give you one little caution.
If you have never invested in real estate before and you have not actually had a rental property even a single-family property as I had, you probably are not equipped to start with a big apartment building, okay? You probably do not want an apartment building that has 100 units or 200 units.
I know there are lots of gurus out there and people other people on YouTube that may tell you to do differently. But Noelle has a lot of experience in this over 18 years experience. Additionally, I have a master’s degree from Penn State and economic development and I have my MBA from Baylor. So, I’m not saying any of this to brag. I’m saying this to tell you that I have a lot of information.
I have a lot of real-world experience and I’m telling you, if you just jump in and you start too big and you go to these big units, you probably are going to get gobbled up and lose money. So, let’s start with how you should start. Since this is your first apartment building, I suggest you start small, okay?
So, let’s talk about what that means because there are tons of apartment buildings that you could get but you don’t want to go too big. You should probably get something that is no more than 10 or 12 units. In fact, there are lots of units like 8 units and 6 units. When it comes to apartment buildings, I’m talking about units 5 and more.
5 units and above. If you are talking about a 1 to 4 unit multi-unit property, that’s not an apartment building, that’s not what I’m talking about. I’m talking from a commercial standpoint, the true definition of an apartment building. Commercial real estate residential is 5 units and up. So, if you can find a 5 unit, awesome.
I actually haven’t actually found any 5 units before but I have found some 6, some 8, some 10’s, and 12’s pretty easily. And that is probably where you should start, okay? Do not get more than 12 units just because it’s going to be probably too expensive for you. It’s going to be a lot for you to manage.
And then when you get all of the documents which I’ll talk about in a second, there’s going to be a lot for you to look at. So, you don’t want to go too big where they just start sending you all you know hundreds and hundreds of pages of PDFs. You want to just see where they have for the past year for just maybe 8 or 10 or 12 units.
No more than that. The second really important thing when it comes to buying your first apartment building is choosing a location. You want to choose the right location for apartment buildings.
The great thing about it is apartment buildings are growing. There are more and more people building them. But when you first get into an apartment building and investing if this is your first one, you know, you’ve stumbled upon this video. Then you probably are not going to be building your own apartment building.
That’s a totally separate thing. I can tell you about that. It’s a really big headache. I actually have a billionaire well as soon to be a billionaire friend who has skyscrapers in New York City and all this other stuff. And it really can get complicated when we’re talking about big, big units. So, when we’re talking about just a 6 or 8 unit apartment building, you’re going to probably be in a major city, okay?
So, I know sometimes there are some apartment buildings that are way out in the suburbs or way out in rural areas. That’s probably not where you want to go. Whatever state that you are in, you’re probably near or not too far from a major city, okay? So, using, for example, Texas. You have Dallas, you have Houston, you have Austin, you have San Antonio. You have a lot of major cities and you want to be near a major city or in a major city. You don’t have to be you know in the major city but you want to be near when we’re talking about apartment buildings.
And the reason this is, is because apartment building investing is really all about the population, okay? So, the more people that you have in an area and the more growth that that area is experiencing, okay? So, the more people that are moving there, the better it is for you as a real estate investor. So, you want to go ahead. And again, I made an entire video on how to find the best places.
I’ll put a link there below for you so that you can get to that video as well. But you really want to choose places that more people are moving in than are moving out. And you don’t want to be in rural areas. are you live in a rural, then you probably want to find a less rural area, a more urban area to start investing in your first apartment building.
Another important thing once you have chosen your location, making sure that you know your market, okay? Make sure you know the market that you’re investing in. You should know what the population growth rates are. You can google this stuff. You should know what the unemployment rate is, you should know what the crime stats are.
Does this place have a ton of crime? You should know your market before you actually buy that property. So, that’s another thing that you want to look at and make sure that you know. So, now that you’ve picked out the location, you feel like you know the market, the next thing is you’re going to review the documents.
So, when you are looking to buy an apartment building before you actually buy the property, you get to see the documents, okay? You can put in a letter of intent as long as you’ve been pre-qualified. They have to submit to you the documents. In fact, most small apartment buildings, they’ll own mostly on the apartment, not you, okay? That’s the great thing about commercial residential real estate, which is that they look at the profitability of the building.
They look at the rent rolls. They look at the t12. The t12 is the trailing documents for the past 12 months on the property, all of the invoices, all the expenses all of the things that they had. They’ll show you the rent rolls. What have people been paying? What tenants have been paying? When did they pay? How much they pay? The rent rolls. It’s super important that you review these documents. And the great thing about it is when we are talking about apartment buildings, they almost have to show you those things otherwise you’re not going to be able to acquire financing.
So, people that are selling apartment buildings, they should know this already. If you’re dealing directly with the private seller and he’s not providing you those things, then you should probably walk away. You need to see the documents.
So, I have a 3-day training that I would love to invite you to where I’m gonna train you for 3 full days you get to meet me in person. Small class, not too many people. You know, it’s not many hundreds of people in the class. It’s going to be a small class. I’m literally going to take you to my properties and show you exactly how we do this and teach you everything that you need to know.
So, when you leave after 3 full days of training, you have your full plan. You know exactly how to invest in real estate and you are ready to go. Please go to Grow Your Wealth Event. That’s 4 words. Grow, your, wealth, event, “.calm”. And check it out. Please start to get your tickets. I can’t wait to see you in person. I would love to train you to answer all of your questions in person M maybe even go to lunch with you.