Apartment financing is one of the most lucrative ways of getting into real estate. This area includes small multi-family buildings as well as large scale apartment complexes and condos.
You’re probably assuming that multi-family (apartment) investing is difficult to get into and that isn’t necessarily true. Of course, you’ll have to do your research on owning an apartment complex while potentially finding business partners to help you secure a great loan but once you get everything figured out and find a trusted broker to help you secure the deal you’ll be on your way to real estate success.
After owning an apartment complex you’ll find awesome tax breaks, ease of management, and the ability to build your real estate portfolio very quickly.
As a beginner it’s crucial that you know and understand the following tips:
Understand the local market rent rates
No matter what neighborhoods you’re considering sourcing an apartment complex you have to be well knowledgable on the average rent rate. Will the apartment complex you pursue be more of a luxury style or a regular apartment? These are questions you’ll have to consider if you want ultimate success with your multi-family property.
This information is easy to find too. A quick Google search of apartment complexes in San Diego will give you an idea of what you can expect to charge your tenants. This information has to be found before applying for any loans and obtaining financing because it will have to go in your business plan.
What condition is the property in?
Skimping over this area can cost you big time in the future. Do your due diligence and ask the right questions. Are there any plumbing issues? Minor or massive repairs?
How old is this property and is the area likely to flood, or have another type of natural disaster. You’ll want to understand the condition of your multi-family investment property from the inside out. Not only for yourself but also for the sake of the broker or lenders you plan on working with.
Shortly after this, you can begin to obtain an appraisal for the property (finding out the total value) Generally, you’ll need to find someone who can appraise a property for you.
Are your finances healthy?
We can’t stress this enough! Your finances need to be in tip-top shape if you’re going to secure a loan on a multi-family property. Among other real estate loans and mortgages, these are a little more difficult to secure which just means that you need to have all your ducks in a row. Excellent credit, a good financial history and things of that nature.
Next, you’ll need to make a decision on the lender or broker that you’re going to use.
High-quality lenders and brokers
Aside from all the above points, this step is crucial for your success. Finding a reputable, licensed broker can make or break your residential real estate experience. As long as you ask the right questions and do background research you’ll find the perfect broker to help you achieve your multi-family real estate goals.
For all questions, concerns or to get started with commercial real estate or residential investing contact us so we can get your real estate goals accomplished!
Keith McLaurin | Licensed Commercial Broker ID#01190109 / NMLS#1209195