Moving to big apartment buildings - 10-20+ units

2 Replies

Hello!  Do you invest in apartment buildings with 10 or more units?  I'm now going into my 4th year of real estate investing, and my portfolio to date includes multifamily, single family, and an 8 unit partnership.  I'd like to break into the 10+ unit complexes.  My 8 unit has made me realize the synergies (i.e. only 1 building to manage tenants and repairs on vs. many single/multi-families), vacancy buffer benefits, and opportunities to raise rents per door.

Can anyone share their experience with me of moving to apartment complexes?  How did you evaluate the numbers differently?  How did you change your deal evaluation techniques?

I'm also interested in finding investors to cover the capital needs up front.  Anyone have experience with this as well?

as you know apartments are valued by cash flow more than the area. Dont forget to factor cap ex and delay maintenance into the equation I see this bite alot of people. Good Luck

I'm looking into the same thing, but one of the problems I've noticed in my stomping grounds is that the bigger, newer apartment buildings in the nicer areas, tend to sell at very low cap rates. Like, 5% and change.

The reason is that a lot of institutional investors are looking for places to park their money, earn institutional returns, and take advantage of the tax benefits that come from owning real estate. 

I'm sure there's still a lot of deals to be had out there, but just be aware that you might be competing with people who are looking for far lower returns than you are, if you're looking at really nice/new buildings.

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