1 / 6

The ABCs of Apartment Investing to Maximize Profits

The ABCs of getting the most out ofu00a0investing inu00a0multi-family propertiesu00a0the way my students did means you should focus on three objectives:<br>A. Get the highest appreciation in the shortest amount of time;<br>B. Put as little money down on the property as you can; andu00a0<br>C. Get that money back as soon as you can.<br>

25887
Download Presentation

The ABCs of Apartment Investing to Maximize Profits

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The ABCs of Apartment Investing to Maximize Profits

  2. The ABCs of getting the most out of investing inmulti-family properties the way my students did means you should focus on three objectives: • A. Get the highest appreciation in the shortest amount of time; • B. Put as little money down on the property as you can; and  • C. Get that money back as soon as you can.

  3. Conventional Wisdom vs. Conventional Opinion If we go back to the specifics of apartment investing, you must always remember one crucial point when buying with no money down: the property must cash flow properly. By “properly” I mean the debt coverage ratio must be 1.20 or higher with 100% financing. Here’s another example of “conventional opinion” being wrong: it’s actually easier to purchase a multi-family property with no money down than it is to buy single-family properties. When you’re dealing with the owner of an investment property, you’re dealing with an investor. Those people focus on the numbers, and if the numbers work, the deal is likely to get done.

  4. Stitching Together the Financing Even though multi-family properties are investments, it’s sometimes challenging to get conventional bank financing for them. It really depends on the bank, the specific property, and the current lending environment. Fortunately, many private individuals are happy to lend you money that they may have sitting in a savings account or an IRA, earning basically nothing, provided that you are willing to give them an 8-10% return. Of course you factor the higher interest rate into the deal when calculating the numbers and if it cash flows properly, it’s a buy. If it doesn’t, you should walk away.      

  5. Return on Education The transaction the Frews did was a good example of the ABCs of getting the most out of a deal. Time will tell how the ultimate appreciation works out, but when you have no money of your own in the deal, and you’re getting cash flow each month, then waiting for appreciation doesn’t feel so bad.

  6. Contact Us • RE Mentor™, Inc.100 Weymouth StreetRockland, MA 02370. • Call: 1-800-649-0133 • Email: support@rementor.com

More Related