Comments on: Buy an Apartment Building Today?

By: rentBits

rentBits — Thu, 16 Oct 2008 19:30:29 +0000

Very true. It seems like the diversification talk is only there to protect the uneducated investor and uneducated investment broker.

By: MasterPlan Capital LLC - Commercial Mortgage Loans - Glenn

MasterPlan Capital LLC - Commercial Mortgage Loans - Glenn — Mon, 28 Jul 2008 17:23:37 +0000

Here’s the problem:

Property owners are not keen on parting with profitable buildings just now.
Think about it; if you had an apartment building and were making money why would you sell it into this (horrible) market today? Why not wait 36 months or when the market may have very well recovered substantially?

If you are considering entering the multi-family sector, be prepared to pay top-dollar for properties that cash-flow. Competition for such properties is intense and lenders will look for experienced investors with healthy balance sheets and large down-payments.

By: Commercial Real Estate St George

Commercial Real Estate St George — Mon, 28 Jul 2008 17:20:15 +0000

The most important part of buying an apartment building is making sure you have a good property management company.

This is what a lot of commercial real estate owners have is tenants and managing.

By: paul youngblood

paul youngblood — Thu, 24 Jul 2008 06:58:35 +0000

There is one “litmus”test for apartment buildings,and anybody who decides to go any other way…get out before you lose your shirt.Apartment buildings are valued at,or let me correct that…should be valued at how much income is left “AFTER”expenses.That’s why I never put any stock in “proformas”because it is based on what it’s going to do in the future,I…am concerned more with what is it doing today….because you can create revenue and for each vacancy that’s filled…you create income and value.Is this a-typical of all…probaly not..but I’ll tell all you guru’s this:you buy yours on the value method of what it’s going to be worth a year down the road…I’ll buy mine for the income..and 2 years down the road….you’ll be selling me your building for a whole lot less than what you paid for it..Why???because I built equity when I bought mine,improved it,did a 1031 exchange…..and then used the equity…to get your building.Don’t hate the player…..hate the game.

By: Charlottetown Real Estate

Charlottetown Real Estate — Wed, 23 Jul 2008 22:41:22 +0000

I believe that it is called diworsification. Why waste your time doing something that you don’t excel at. No money at that. Spend your time doing what will give you personally the greatest return.

By: Miami Real Estate Attorney

Miami Real Estate Attorney — Wed, 23 Jul 2008 19:43:16 +0000

Multi-family properties here in the Miami area rarely generate any real cash-flow, as for the last decade they were bought and sold based on future appreciation. Breakeven is usually par for the course. Refinancing is often impossible because the appraisals are down and taxes are up.

By: Chris Lengquist

Chris Lengquist — Wed, 23 Jul 2008 13:40:47 +0000

I agree with your premise. Getting the financing today is much more difficult than it has been, however. I’m working a couple deals right now that are shaky only because of the current lending environment.

That said, a niche in the market will almost always yield greater dividends than your mutual funds. Period.