Is a 6 unit apartment a good way investment?

Question

There is an auction in about a month for a 6 unit building, fully rented out as far as I know, for 2650 a month. Thing is, I know auctions all have their own set of rules and such. And it's an online bid type of auction. While in trying to learn about Wholesaling, I'd like to dive into the investment end of Real Estate as well.

Guess I'm asking for a bit of help or info from anyone who's done a lot of auctions and if there are loans out there to fund such an investment, whatever it ends up being, within reason? Any help is appreciated. I'm a newbie, just trying to make smart decisions.

Bob S. · Answer

This is an auction he's not getting a loan for it. He will never be the winning bid.

Bob S. · Answer

You are not anywhere near ready to take this on. DO NOT EVEN ATTEMPT. You can't get in, you do not know the Reno,. You do not know if they're paying rent. Why is it foreclosed? You do not know how to determine the real value. The fact you are asking, is there is a loan for this only proves my point,

Show it to someone doing deals, IF its good they will pay you a finder's fee. Save , learn then go on your own

Good luck

Nathan Gesner · Answer

If it's an online auction, there will be a lot of competition. Most of them will know much more than you and have deep pockets. It will probably sell for more than it's worth.

I would watch and learn, but I wouldn't participate.

Michael Goetz · Answer

It's important to thoroughly research the auction process and potential financing options before diving into purchasing the 6 unit building. There are loans available for real estate investments, such as traditional bank loans, hard money loans, or private lenders. Make sure to carefully consider all the risks and potential rewards before proceeding with the auction. It may also be helpful to consult with a real estate attorney or financial advisor for guidance. Good luck!!

Lin Yin · Answer

@Dakota Workman

The 1% rule doesn't work for a 6 unit which is only collecting just over $400 a month per unit. The cap ex, repairs, broken appliances from a 6 unit will eat you alive. You will probably need a 5% rule for this peice of shit property to just not lose your shirt

Dakota Workman · Answer

Thanks for everyone's replies so far. I am being more cautious with this, just to throw it out there, since I've read plenty of horror stories about auctions. Definitely don't wanna get a bad deal. I do wanna say, when I mentioned earlier about the 2650 in rent, I meant from tenants. It's got every unit with tenants in it, in my untrained eye, that means the place is at least a bit up to par. But I'm inexperienced, so I can't just take that at face value, thinking just because it has tenants, that it'll be worth having. Because like Bob said, they may not even be paying any rent and that would be TERRIBLE for a new guy like me, so I see how he's right in that regard.

My max bid, if I got the funds, would have been no larger than 100k, if around that. Using that 1 percent rule I hear, to make sure you make money back on the rent thats paid. I'll definitely look around for someone more experienced and show them the place and what they think about it. Probably the safer, smarter option.

Bob S. · Answer

You are MUCH more politically correct then me,

All the best

Is a 6 unit apartment a good way investment?

Is a 6 unit apartment a good way investment?

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