Are 12 family apartment building a great investment?

Question

I'm considering buying a 12 family apartment building. Are they great investments? Are they difficult to sell? Prices have really come down in my area and I found one that really seems like a good deal. Any other considerations?

Answer 1

What repairs need to be made? Upgrades?

What kind of financing will lenders offer?

How much would your revenue be each month, and how much your expenses? Would paying the expenses be a stretch if reveue was lower for a while?

Do you have the necessary expertise to manage, or would you need a management company and hired workers for everything?

Do you have the necesary down payment?

What would the return on investment be given vacancy rates in your area?

Just a few of the questions you need to answer first. Find some professionals (including an agent) that you can trust.

Answer 2

Your question is almost impossible to answer given the information provided, but here are my 2 bits;

If you have determined that the numbers work for you, i.e. cashflow, financing, capital appreciation potential, tax issues, return on investment projections etc. it does not really matter how big or small the building is, go for it.

Asking if a building is hard to sell is asking if gold will go up or down in value, who knows, and when are you planning to sell it, If the intend is to flip the property, a complete different set of issues comes to mind then when you plan to hold the property for cashflow.

To flip you need to be able to somehow add value to the property so that you can make money on it in a short period of time.

If you are holding it for cashflow, there should not be any reason to worry about the ability to re-sell, because why would you ever sell something that is producing great cashflow.

Even if you did want to sell then obviously the numbers will do the talking again, if the numbers at that time make it a great investment for the next owner they will buyt it.

You may want to do some studying on the process of buying holding and operating real estate as a business, as it really is a business that needs some real hands on knowledge and expertise, if you have acces to a great network of allied resources, that would be even better.

I mean a network of likeminded people like ;

inspectors, property managers,realtor, mortgage brokers, lawyer, accountant. that are actively involved in real estate investing on their own account as well as offering professional service.

A good book to read is the millionaire real estate investor by gary keller.

Good Luck

Answer 3

Is this investment intended to produce immediate income? If so you need to look carefully at property taxes and maintenance costs. What is the occupation rate? What is your tax status? Do you have to borrow the money? What kind of tenant screening process to you intend to use? I find in my area that approximately 35% of the gross goes to fees, maintenance and taxes -- after a careful screening process. You cannot expect 100% occupancy -- even if it has been. If you are in a declining market, the reason to buy would be for immediate income. What is your time frame? If you have to sell in a declining market you might not get your loan value covered. What is the neighborhood like -- is it in decline, stable, or building? What is the land value without the building? Have the building professionally inspected -- not by you even if you are a professional -- you need an objective view. Carefully research the title - good deals carry baggage -- find out what that baggage is. Start with that --

Answer 4

I would first make sure that you can finance it. I know my company doesn't deal with any more than 4 units. With 12 units you will be taking on a lot of risk. Have you ever been a property manager before? Some lenders won't even extend a loan to you on a property like this unless you have experience managing properties. They won't extend this for a good reason, if you don't have this you quite possibly will forclose. Banks are very good at judging risk. I would see what type of financing you are eligable for and if its only Hard Money or other risky credit lines realize that these investors quite possibly can see risks that you cannot.

Answer 5

In most places, real estates make a good investment right now. But watch the indices carefully for your place and adjacent areas before you commit.

Answer 6

Race and color particular as hell does not have something to do with something whilst residing in residences. somebody suggested this until now yet i will say it back. If it somewhat is the only "situation" you are going to be able to desire to deal with.. be chuffed! I stay in a stunning apartment community run by using the suitable landlord ever, or perhaps nevertheless SHE'S picky approximately who lives here, I nonetheless stay around creepy, LOUD AS HELL human beings. THAT above each and every thing is a situation!! we are talking weird and wonderful form of creepy. Then there is the heavy chain human beings who smoke under us. this type of chain smoking the place they are partitions are YELLOW and the scent is available in by using our vents (and each physique elses in our hallway and the single under us). I recommend, how DISRESPECTFUL are you able to in all risk be? to no longer point out they are heavily obese (ironic, no?). I easily have no longer something against weight the two, yet once you're that vast, residing in a one mattress room apartment room.. sturdy lord. Then the guy next to us offered a valid equipment for God is conscious how lots, so evidently like a custom is going by using each and every night. additionally, he watches porn around 3 AM each and every night/morning.. which hey.. if the temper strikes you, extra ability to you.. yet how damn creepy is it to pay attention each and every thing and understand what's occurring? Yuck. it somewhat is ridiculous. i admire my peace and quiet, in spite of if it somewhat is residing interior the rustic or residing 2 ft from different persons. it somewhat is lots to ask for whilst residing in residences, so in case you have have been on condition that, then irritating approximately what form of family members is shifting in close to you is basically ridiculous and that i say discover something else to stress approximately! in case you have not got peace and quiet, circulate away.. yet you would be surrounded by using categories of folk no rely the place you circulate presently.