Need direction!!!

I am interested in buying a multi-family apartment building possibly within a year; I am currently working on bringing my credit score up. What is the best way to buy an apartment building of 10-20 units? I don’t have a down payment, but I do have approx. $30,000 equity in my home. I would like to buy a building with no money down, but don’t most lenders require a 20% down payment? And I do have some investor experience. I previously owed 2 rental houses and rented them out to Section 8, but when the properties needed repairs, I had no cash reserves to fix them. The tenants had to move out, and the houses went into foreclosure because I could not afford to pay the mortgages on them.

I thnk that the best suggestion anyone could give you is “forget it”. Sorry to be so blunt, but if you couldn’t handle 2 houses, then you certainly aren’t ready for a 10-20 unit building. You obviously didn’t learn the previous lesson - it takes money and/or credit to run a business. You need to improve your credit, earn some cash, and most importantly get some REI education BEFORE you buy any more properties. With the foreclosures on your record, this will take some time - probably a lot of time.

Good Luck,


I would have to agree with propertymanager…

10-20 unit properties will require either owner finance or commercial financing.

I think that if you’re serious, you should study up and start over with SFHs. From this, you can learn basic property management.


I will beat REO here and say - do not put into jeopardy your main residence by using a HELOC for the down payment on an apartment building. You have negative rei experience. When you had your rentals you should have been saving back a portion of the rent for repairs. You were a slumlord.

I disagree. When I had the 2 rental properties, the note for one rental was $550, and Section 8 only gave $450. I had to add an add’l $100 out of my paycheck to cover the mortgage. On the other rental, the note was $620, and Section 8 only gave $550. So I spent out a total each month $170 out of my paycheck just to cover the 2 rental mortgages. And I am not a slumlord. Section 8 required the 2 rentals to be in immaculent condition before the tenants even moved in, plus they had to pass inspection. It was the TENANTS who caused damages to the rentals. To share this with you, on the 2-bdrm, I received a $5,000 grant from the state prior to it being rented out. I had a new furnace installed, new waste stack, all new pipes from the bathroom & kitchen, and new walls and ceilings. So I am not a slumlord, I just didn’t have the cash reserves to do the repairs.

I try to be as supprtive as I can with inexperienced investors but this whole post is frought with conceptual mismanagement!

(1) Self-admitted lack of reserves.

(2) Purchase of rental units that were, in actuality, “alligators”, losing money each and every month.

(3) Use of the Section 8 system without a full understanding.

(4) Letting the tenants damage your units apparently with no repercussion to them or the Section 8 program. Did you report the damages (with photos) to the Section 8 authorities? Did they kick the ‘violators’ out of the program? Where was your supervision of YOUR investment during this?

Now, you want to buy 10-20 units – how much per month will you lose on these? How much can you afford to lose? How much have you saved for reserves? Where will you get the downpayment?

I’m with the group – you need to study some more and figure some of this stuff out. Do NOT put tour perrsoanl residence at risk with a HELOC – when it all goes to Hell, you’ll need a place to live and if you leverage your home, they’ll take that too!

Just my two cents.


Keith is 100% right! The biggest problem here is that all of your previous problems with the 2 rentals were self-inflicted. Worse than that, you didn’t learn a thing - except how to blame the tenants for your shortcomings. YOU are to blame for YOUR problems.

Not everyone is cut out to be a real estate investor. If I were you, I’d take up a hobby and forget REI.

Best of Luck,



Perhaps you could tell us how you really feel…LOL!

You’re right on the money and have made it as plain as it can be made.

In the Amy, we were pretty big on Acronyms…this would be referred to as a “SISCW”…a “self-inflicted sucking chest wound”…


So much for mentoring. :frowning:
No harm in trying again. Just try not to make the same mistakes again.

What sort of mentoring would you suggest, Jeff?

We started the thread with what we felt the proper suggestions would be, but got “I disagree”…

OK, if someone’s not going to listen to reason, it’s fine with me - my credit and capital are not at risk. However, you’re completely wrong when you say “No harm in trying again”…there could be HUGE harm…he’s toying with the idea of a HELOC, putting his personal residence at risk! I still personally believe that a 10- or 20-plex for someone that failed with 2 SFHs is totally unrealistic.

Sometimes the best advice hurts…remember “Life Rule #1” (if you can’t stand the answer, don’t ask the question)…