Rookie looking for help!!!! Apartment Buying Pro's Only

General Real Estate Investing
1

How is everybody, Hope all is good in the investing world. I need some big time advice. No BS if you dont know then please dont reply.

I’m a rookie needed some advice on buying apartments. I have checked out a few books ( Not Important). And not clear on how I can buy a mulit-family apartment with no money and no credit. Cause nothing is clear. On what steps I need to do. Their is gold mines all around where I live. I got that much from the books but how do I make these so called success stories happen for me. Thanks for any info you can give me. And also you have have any material you think I need to look into let me know. Keep investing to the top ![b][b][i][i][/i][/b][/i][/b]

2

Read this book-

http://www.1minutetorentalpropertyriches.com/index.html

To be real, one thing I must warn you about is that it actually took me 3 minutes to become rich by real estate investing, not the 1 minute I was expecting. But I had patience, and persevered.

JP

3

Thanks for the info… Any real live experience at all. I take that info too.

:help

4

Looking for new inforamtion that someone is using now. Some up to date info. Latest trends. Let me know what your ideas are. Guru’s have been deleted. Stop marketing. This book dont sound to bad…But dont try to sell me $1000 advice. Maybe later.

5

Heart,

You CAN’T buy a multi-unit apartment building with no money and no credit. Unless you just happen to meet an owner who is so sick of his property that he will just sign it over to you.

But now what will you when the water bill comes due? When the toilets back up and the plumber wants cash? How will you pay for the newspaper ads to fill the vacant apartment? How will you pay the note (loan from seller) on the property–no owner is likely to walk away without a promise of future payments.

Apartment-buying pros are not gonna wanna talk to you! You NEED to be talking to the beginners, the guys and gals with no cash like you. Maybe they can tell you what their first step was.

My advice is to be a little more humble in your quest. If you are at the bottom of a mountain, you start climbing there–not halfway to the top.

You need to study some of these advice threads, and maybe think about a single family house or duplex for a first purchase. Or become a Bird Dogger for those who actually CAN purchase something right now.

Furnishedowner

6

HeartofaLion,

There are several ways to buy apartment buildings with no money and no credit. You can buy via owner financing; lease-option; subject to the existing financing, etc. I have bought properties using all these methods. Unfortunately, buying a property is the easy part. Holding onto it and making money are the hard parts. It’s easy to buy a building with no money and no credit, but it’s almost impossible to run a rental property business with no money and no credit.

Before you think about buying an apartment building or even a single family house, you NEED to learn the reality of the rental business, ESPECIALLY CASH FLOW ISSUES. The vast majority of newbies fail in this business and almost every one of them thought they were going to get rich with no money and no credit.

Good Luck,

Mike

7

Money talks, bull**** walks.

8

I would tend to mostly agree with Mike above

as I have seen and made deals without cash on hand and even in times my credit was screwed up> of course I will admit that was after the boom of the 80’s and well before this crisis> LOL

I made some creative (Might i add) Risky deals.

whenever anyone asks me for advise as to how to get started I always tell them the one thing I did wrong from the start that I would change if I could go back

that one thing is >
I wished I bought a duplex or Multi for my first home.

My first few deals were OF with creative down money
Usualy I paid an extra Monthly premium to kind of borrow the down money from the owner> and split it into two payments>

ie> 55K total sale price 500.00 earnest > 5K Down >
2K at closing 45 days out
amortized over 30 years > ballon in 5 years > payment 340.00 per month
second lump down 2500.00 due in 6 months willing to pay 440.00 per month until second installment made>

to be honest I actually scrapped metal to come up with the down money to pull this deal off!

I took title > refinaced the property with equity loan in 3 months and paid the deal out before my second down money was due.

The point of this story is> that if your determind enough and serious you can find ways to make a deal work

But like Mike said once you have the property what about the expenses of keeping it???

all I can say is Think" outside" the Box if your cash poor and desire to make a deal happen

Just my two cents!

9

Thanks Mike, ABS, for answering my question.

I have to say ABS I agree with Mike too. I am a little less than a rookie I just started reading about real estate… And really got interested in mulit family buildings. Now Mike hit it right on the nose. Leasing option. Cause of the cash flow problem which I do understand…Lets try a different approach. I read that I could call up a seller and ask… For the option to buy after a two year lease. The real life example from ABS was the answer I was looking for. Not looking to get rich just get started. I know they are not easy but I want to start some where. Maybe a building with 4 units if possible. Question if you live on the property would it be wise to have those other units say (3) in a 4 unit property if you live there. What about staying there for 2 years do the same concept ABS and pay extra and at the end of the 2 years have a nice down payment. What do you guys think about this …Right direction or off base on my part… Thanks guy for your help and if you know any body else who has done deals like this please ask them to share a story or two :beer Take Care

10

HeartofaLion,
If you live on the property(Owner Occupied), you could do an FHA insured loan for up to a 4 unit building with 3.5% down. I closed on a 4 unit on December 30th with that type of financing.

Mike aka (Property Manager), who you responded to earlier is the author of the book I recommended you read. BTW- The title is “sarcastic”. It’s a sobering book about the realities of a rental business.

Here are my initial expenses this month (Not Including PITI):

Snow Blower Repair $254
Replace Broken Refrigerator (used) $180
Heating system repair 1 $150
Heating system Maint. 2 $100
Sand/Ice Melt $120
Attorney $500

Total out of pocket_ $1304

The snow blower repair was optional. The other repairs were mandatory. It is impossible to do this without some cash or credit.

In reality this month I’ve delt with:

Court-Attorney-Eviction
Insurance Inspector
State Health Dept.
State Lead Inspector
State Fire Marshall
City Fire Marshall
City Fire Alarm Supervisor
Electrical Contractor
Alarm Contractor
General Contractor
FHA Admin.

FWIW- Because I read Mike’s book, most of these expenses were anticipated and budgeted for.

-JP

11

Well to be honest> the Guys above are right on the money!
Costs to keep things running> which I did metion in my pervious post

And You need to pay Note to the one thing I have going for me that not every Investor has !

I am a Contractor ( Jack of All) and I do Just about everything in house On most of My units.

All My rehabs I do from start to finnish
( regardless of what state they are in)

and Most of my repairs I do In house!
the few times I pay outside help for this stuff is Out of state units I deal with
and I have a cash cushion these days to deal with those kind of issues.

I’m not saying it can’t be done> because I have done it.
But I will say You have to be very creative and have abilities above and beyond recieving money> LOL
which collecting your rent is an art in itself sometimes!

I fully agree it is NOT a get Rich Quick thing> it will take many headaches and long Nights to build a deal and a portfolio >
many would ( and Do) Give up and just sell out ,after a few 40 hour weekends!

You need a solid Plan and GUTS with deterimation
and Don’t quit your day JOB> :smile

I found Owner Finance to be My way In
My first 5 deals were OF
By the way the deals I put together were Not even listed as OF deals they were fair Market Houses the owner wanted out But sat on market for long periods.

a tip On that Note> when you find one don’t haggel final price as much as terms!
If you find the right one> the seller will be very motivated he may even give you cash at closing> to help with closing costs or pay them all out of sellers acount!
Not to mention You should get the security and any prorated rents paid>
3 unit Building>
sale listed at 110.00 >apraises at 159K> days on market 180
Deal terms> Offer 97,5 with condition of finacing aproval, should finacing aproval not be possable for any reason Purchase to be made OF
97,5K OF at 30 years 8% with ballon in 5
2 units rented at 600 a month> 1200 in security and pro_rated rent at closeing half month for each =600.00
Last Months rent from tenant on account at lease signing= 1200.00
total closing rental moneies conveyed to buyer 3000.00

Total financed with closing costs to you say 99,5K
5 K down to be spilt into 2 payment 1 K at closing 4 K in 6 months

Owner to pay all closing costs , title insurance and all other fees> Minus Sellers legal fees and transfer of deed fees
Prorated taxes as well as all other related fees Not listed to be conveyed into OF total finace price
In this deal you walk away with full OF for 5 years AM at 30 Y @ 8%
Most of Your closing costs he financed
Your legal fees and cost you had to pay at closing come out of the secuiry and prorated rents
say 500.00
3000.00 transfered to you

  • 500.00
    -1000.00 down
    =1500.00 in your pocket
    2 rented units and a vacant unit
    Move into the vacant unit refinace the whole building with an equity loan in a 6 months or less and then move out and rent the unit you were in

Its a hair pulling deal ! But it pulled off> Mind you I still own this building and after many hours of work it’s a HUGE cash cow
it currantly Pulls 1300 + 1050+ 650 for a total of 3K a month in
Positive flow after all expenses is almost 1k

I’m just a little guy still trying to build> but I have been at it for many years now.
I’m no expert, But on the other hand I know things can happen if you work it!
but you better be willing to work your tail off to do it !!!

If You have the Fortitude You can do it too :biggrin

OK I’m up to 4 cents Now!

12

I see Jfpen alot can go down in a short time. But you still maintained, with alot of hard work. Thanks for that, talk about a eye opener with a real example how things can go down hill quick but you pulled though. U know it can be done. ABS you keep coming with plans and the whole lay out thanks for both examples, question this is a good deal… alot going on but I am starting to understand a lot better seeing and running numbers. Instead of a book just saying term deals, OF, or lease to buy. Perfect examples. …Are these deal just luck of the draw. I have read David Lindahl Multi family millions and the cash flow series. Is there any other books to read up on for more education. ABS did you have any repairs on this building? And last question Jfpen Tell me more about the FHA insured loan. How much was the 3.5 down. Trying to get idea. I was guessing maybe 5k down? Thanks for all the help… Till next time keep the info coming it’s really great. :smile

13

Did I have any repairs to that Building???

well seeing how the rents were 600 a month and now they are much higher should say it wasn’t all in
just jacking up the rents to meet the area> LOL

Yes For the first few years I rolled back in a good piece of my rents to improve and upgrade this building
basically I cash flowed at 100 or less for the first few years just dumping the rest back in.
Mind you I gave my labor for free as an investment so all I paid for was materials.
But yes I have done lots and lots of work to this building to be able to get the highest rents in the area> and it is fact people will pay a higher rent to live in a nicer building (smile)

You rent out a dump you attract dump dwellers!