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The Ultimate 8 Steps To Getting Started In Investing In Apartment Buildings (You Don’t Want To Miss #6!)

by Michael Blank on June 2, 2014 · 9 comments

  
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Hey everyone!

Thanks for your positive feedback about the video blog last week. Here’s another one!

In this video, I want to talk about 8 steps a newbie investor can take in the next three to six months to get started with apartment building investing.

While the task can seem overwhelming, there are some well-defined and easy-to-do things you start doing today. Do a little bit each day, and after a while, you’ll be amazed at what you’ve accomplished!

Step # 1: Read Free Stuff

Related: Getting Started in Real Estate With Less Than $1,000

Start of course here, with the BiggerPockets.com.In fact, if you search the article archives, podcasts and forums, chances are it’ll keep you busy for weeks and you’ll never need to go anywhere else.

Step # 2: Buy A Book

Go to Amazon and Google “apartment building investing” or something similar. There are several good books on the subject that will give you a good overview of what apartment building investing entails.

Step # 3: Network With Other Investors

Attend your local Real Estate Investor Club meeting. Soak it all in, and after a few visits, you’ll figure out who the commercial real estate investors are. Take them out to lunch and pick their brain.

Step # 4: Attend A Seminar

Once you’ve made up your mind that you want to get into apartment building investing, it may be time for you to invest in a seminar or course. A good seminar (even one that may be more expensive) will help you avoid some of the more basic and major mistakes and will speed up the learning curve.

Step # 5: Create A Sample Deal Package

Search for deals on loopnet.com and request the marketing package for one of the deals. Create a Deal Package with information about the property, photos, your business plan, actual financials, and projected financials and returns. This is useful in several ways: (1) it helps make the whole thing more real to you and (2) you can use it when speaking to potential investors, brokers, and lenders to give you credibility.

Step # 6: Practice Analyzing Deals!

Related: Income Real Estate Investors: Learn How to Analyze a Property before you Get Burned!

Buy or create a deal analyzer spreadsheet to answer the question “what is the most I can pay for this deal?” The more you analyze, the more confident you’ll get.

Step # 7: Tour a Property

Call a broker, request the marketing package, analyze the deal, and arrange a visit of the property.

Step # 8: Make An Offer (Yikes!)

Submit a Letter of Intent and hold your breath! The worst that could happen is that it gets rejected. Submit another one. If for some reason your offer is accepted, don’t worry, it’s not legally binding so you can always withdraw it.

If you do these 8 steps over the next 3-6 months, you will be amazed at how far you’ve come.

OK, enough talk, let’s watch the video!

 

Please share anything that helped you get started with real estate investing!

Be sure to leave your comments below!

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{ 9 comments… read them below or add one }

joseph ball June 2, 2014 at 9:14 am

Not sure this works.
Step 5. To obtain financials, you must submit POF. This can be a problem, if you are just starting.

Reply

Michael Blank June 2, 2014 at 9:37 am

In most cases you can get the marketing package without proof of funds. Especially if you request the marketing package from the larger brokers like Marcus & Millichap, CBRE, Sperry Van Ness, they’re marketing packages are awesome and contain almost everything you need. Now, in order to submit a contract (but that is beyond the scope of this “getting started video”), you will need proof of funds … I’m mostly concerned with inspiring people to start on their journey to apartment building investing … thanks!

Reply

Eric June 2, 2014 at 5:24 pm

I analyzed 100s of deals before I made an offer. Just getting the information from LoopNet or the MLS is enough to start. I know the price, and I know what the expense numbers should be.

Typically they give income numbers, and you can use a 45% for expenses. then come up with a price. I found most properties way over priced.

To may people think you need to have all of this ‘stuff’ before you can start. No one even needs to know that you are looking at property. It can be anywhere in the USA, you are just practicing.

Reply

Michael Blank June 2, 2014 at 6:42 pm

Exactly right …

Reply

David O' Donnell June 2, 2014 at 7:54 pm

When you mention taking a seminar what seminar would you recommend? I was looking at lifestyles unlimited but it seemed a little multi level marketing – Amwayish? I try to stay open minded but want to make sure I am listening to good people.

Great article!

Reply

Thom Soule June 3, 2014 at 2:25 pm

Thanks, Michael, this is very helpful! As a complete novice, I do often feel overwhelmed. But this list feels like a collection of steps I can reasonably take–and giving myself a window of three to six months to practice and gain confidence feels much better than rushing ahead without really knowing what I’m doing. I’ve also been wondering the same thing as David: where can I find information about seminars that are helpful and legitimate?
Thanks!

Reply

Michael Blank June 4, 2014 at 3:06 pm

It’s a fair question about seminars (there are so many!). I’ve done one and know of others, but I don’t really have a good overview of what’s out there. If you send me a message we can take if offline perhaps ….

Reply

Aaron June 5, 2014 at 2:45 pm

I live/work in DC where the market is flooded with cash in hand multi-million dollar investors. How can I compete? For instance 4 unit building was selling for $350k and i offered $375k and within 12 hours there were 16 cash offers. (this has become the norm)

Reply

Michael Blank June 5, 2014 at 5:25 pm

Aaron – this is a common issue on both coasts especially. There’s a lot of cash chasing only a few deals. The trick is to establish good relationships with 3-5 good brokers, and when you do, they may feed you off-market deals. I am over-simplifying the challenge, persistence is the key. Also consider out of area investing.

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