Where can i invest 500k apartment

11 Replies

Hi bigger pockets community, I have around 500k from home equity that I like to invest in 500k apartment. However i might not find something here in Bay Area but maybe out of state, so if you guys know of any leads that I can look into please message me. Thank you very much Kevin
Originally posted by Account Closed:

@Kevin Zhang please don't take $500K that you earned in Bay Area real estate and go buy an OOS C/D class dump that rents for $500/door. 

 Lol yeah but can’t find anything that make sense? Only thing I can find is possible Sacramento or Stockton Duplex.... any suggestion  or lead or place to look into? 

for $500K you can buy much more than just a duplex. Are you trying to pay cash? Why?

How did you earn that $500K equity? Perhaps buy another one of those. 

Originally posted by @Kevin Zhang :
Hi bigger pockets community,

I have around 500k from home equity that I like to invest in 500k apartment. However i might not find something here in Bay Area but maybe out of state, so if you guys know of any leads that I can look into please message me.

Thank you very much Kevin

 Hi Kevin - Consider partnering on a larger deal with other equity and experience partners. That way you accelerate both your learning & earning.

For example: I just partnered with two friends on a 38 Unit close to Sacramento that we are closing on on the 15th of this month.  They work fulltime and between the two bring in the majority of the $1.1M we needed to pay down.

While I also bring in a significant part of that equity I benefit from my partners equity contributions. And they in turn benefit from my experience and the fact that I am available full time to get this deal over the finish line and take on most of the asset management afterwards. 

Since it is a partnership (TIC) and not a syndication their experience goes from 0 to 38 units + they are on a Fannie small balance no recourse loan, so they get that on their resume too. Plus, they can be as involved as their full-time job allows them to be, or not, since I am available to do the work the property management company does not do anyway.

Anyway, If I were in your shoes (as I once was) I would look for something like that. If you want to make it big in real estate you need know accept that at the higher level it's a team sport.

If all the above does not mean much to you, I'd recommend studying Multi Family/commercial investing a bit -  As I wish I would have done *before* wasting years doing duplexes and triplexes that while they worked out great for me do not scale and are a slow game:).

Hope this helps!

Best,
Chris

Stockton is a great MF market.  We closed on 3 properties with almost 50 units total in 2018 and looking at more there.

Let me know if you want to know more about that market as well as other ones in Norcal.

Definitely recommend partnering up with someone more experienced.


Originally posted by Account Closed:

for $500K you can buy much more than just a duplex. Are you trying to pay cash? Why?

How did you earn that $500K equity? Perhaps buy another one of those. 

 Account Closed, well that was what my lender said because taking Heloc with adjustable is not something i looking foward to so he suggested refinanced and can purchase a investment property with all cash.    Because my house gain value in equity like 50% increase. 

Originally posted by @Chris V. :
Originally posted by @Kevin Zhang:
Hi bigger pockets community,

I have around 500k from home equity that I like to invest in 500k apartment. However i might not find something here in Bay Area but maybe out of state, so if you guys know of any leads that I can look into please message me.

Thank you very much Kevin

 Hi Kevin - Consider partnering on a larger deal with other equity and experience partners. That way you accelerate both your learning & earning.

For example: I just partnered with two friends on a 38 Unit close to Sacramento that we are closing on on the 15th of this month.  They work fulltime and between the two bring in the majority of the $1.1M we needed to pay down.

While I also bring in a significant part of that equity I benefit from my partners equity contributions. And they in turn benefit from my experience and the fact that I am available full time to get this deal over the finish line and take on most of the asset management afterwards. 

Since it is a partnership (TIC) and not a syndication their experience goes from 0 to 38 units + they are on a Fannie small balance no recourse loan, so they get that on their resume too. Plus, they can be as involved as their full-time job allows them to be, or not, since I am available to do the work the property management company does not do anyway.

Anyway, If I were in your shoes (as I once was) I would look for something like that. If you want to make it big in real estate you need know accept that at the higher level it's a team sport.

If all the above does not mean much to you, I'd recommend studying Multi Family/commercial investing a bit -  As I wish I would have done *before* wasting years doing duplexes and triplexes that while they worked out great for me do not scale and are a slow game:).

Hope this helps!

Best,
Chris

Hi Chris, for sure will look into it.  That sounds like a good deal, but yeah i got to learn the pros and cons and must have a trustworthy partner.  

Thanks

@Kevin Zhang

"Hi Chris, for sure will look into it.  That sounds like a good deal, but yeah i got to learn the pros and cons and must have a trustworthy partner.  

Thanks"

You are welcome. And you are absolutely right: Step one, learn all you can about what you want to invest in. And step (which you can start while you are working on #1) is to find people that are not only trustworthy but also align with you what you want to do yourself. Don't wait until you have a deal to get to know people. The sooner you start building a relationship with a broad group of people the longer you'll know them by the time you will actually be selecting a partner that aligns with what you want to do. In my experience flaky/squirrel-y people or people that are not well grounded in reality are pretty bad at hiding their true colors over a longer period of time.

You are talking about a lot of money going in and, if you do it right, even more money coming out and a long time before you reap the benefits. So it is definitely worth spending some time/energy on the above. Buying a duplex would be way quicker on the front end but IMO it would be a way longer road after.

Best of luck!

Chris