3 myths about Flipping Apartment Complexes
The average real estate investor assumes that investing in apartment complexes is expensive and difficult. The process of wholesaling multi-family units is very similar to that of single family homes and much easier to get involved with than most people are aware of. The current economy has created a perfect storm for investors who are educated. I’m disabusing you of 3 incorrect assumptions below about flipping apartment complexes… 1. You need good credit to get involved in apartment complexes FALSE! The truth is, banks care even less about your credit score when investing in apartment complexes. This is because banks understand that most private citizens can’t afford such a big down payment on large multi-family complexes so they look to the actual complex itself as the sole collateral (also known as a non-recourse loan). Your credit score becomes irrelevant. 2. You need a lot of money to invest in apartment complexes FALSE! Apartments, as part of the commercial asset class, have a long-standing tradition of being bought with other people’s money. The use of limited partnerships and syndicates bringing together private investors to do these deals is very typical. And with the current economy there is no shortage of people realizing the HUGE income potential and tax benefits of investing in apartment complexes. Myth 3… Apartment deals are tougher to get and close than flipping single-family homes. Not true! They are easier than single family homes. There are property management companies out there hungry for opportunity. Finding buyers for apartment complexes is easy, and because of the prominence of these myths, there is almost no competition for these deals. Most investors are scared off by the huge numbers in these deals. What that really means, is more zeroes in your assignment fee payment. As you can see, Apartment deals aren’t the tremendous, daunting deal they appear to be on the surface. All those hurdles discussed above, are either non-existent or actually advantages if your a serious, professional real estate investor. In today’s market, a myth of this sort creates an unfair advantage for those in the know. Michael Kimble is a successful real estate investor, specializing inWholesale Real Estate, and has 7 free marketing systems for other investors. Go there to sign up for them right now. |