wholesaling apartment buildings

while riding looking for vacancies, i came across 2-3 aprtment buildings that are vacant and run down. i want to get them under contract and flip them to another investor. i dont know if apartment buildings have enough spread in them to wholesale or even if you get them under contract the same way you get houses under contract. i think they can be lucrative, but unsure of the market because i dont know how to measure ARV or comps for them. someone told me that i need a proforma, but what is that? one of them actuall has store fronts on the bottom. i remember when people actually lived in them and shopped in the stores-- my grandmother shopped in the stores frequently. now they are eysores. what do i do?

Hey Minya. If you want to learn more about apartment complexes, I highly recommend this book by Steve Berges:


It doesn’t talk about wholesaling at all, but it is very thorough about valuation of apartments. Determining value of apartment complexes is very different from SFHs. I’ve actually thought about what would be the best way to go about wholesaling complexes. I haven’t found any information about this subject at all. I’m sure you would have to compile a buyers list of local apartment complex owner’s to market to when you do have one under contract. Sorry, I don’t actually have any experience to share with you.

PS - I have seen David Lindahl’s “Apartment House Riches” has been a top seller for awhile, but I’m not sure if it has anything about wholesaling at all.

Yes you can wholesale apartment buildings but there is a lot more involved in doing it.

A proforma is basically the iincome & expenses for the apartment building.

If the buildings are vacant, then there isn’t any income, so it will be a little tricky getting financing for them.

Things you will need to look at before placing an offer:

  1. What is the area surrounding the buildings? Is there growth or potential for growth? Would an investor want to invest there?

  2. What are the rents in that area for the same type of apartment building? That will give you an idea of potential income.

  3. How much are the repairs? Is it an old building that will need to be brought up to code?

  4. How much do the current owners want for it?

  5. Do you have buyers in mind to wholesale to?

After you look at the numbers, is there enough left over for you to get paid? Usually on vacant apartment buildings there isn’t enough meat on the bones!

Patti Porter

Howdy Mina:

I would venture a guess that the property is not worth the costs to fix it up. Run some quick numbers by looking at other buildings in the area to see what they are worth. Is the area coming back or is it a war zone. Detroit has some really bad problem areas.

it is vacant and has been for about ten years now. there are some in the area that were vacant just as long, and they have been rehabbed, the store fronts have been redone and are now occupied both commercial and residential. it is in a designated redevelopment zone. the funny thing about my neighborhood is that you will find 200-300k homes in fenced off subdivision right in the middle of my neighborhood, but the old homes, the eyesores, and everything else is still there. you got brand new in-fill homes that are being rented through a government backed program. then there are a couple new shopping centers. this apartment building sits right in the middle of everything.

If it’s been vacant for some 10 years and there are expensive homes in the area now, maybe apartment buildings are not the “highest and best use” anymore.

Consider changing the use of the land and you may be able to make a great deal. Bulldoze the apartments and build a high end retail center if the zoning allows for it. Or whatever there is a need for that the current market is not supplying.

Commercial investors who have the vision to “see” these things are the ones who tend to make lots of money. Although this would involve a lot more time, money and risk than I think you were planning on.

Good luck to you!