Best place to buy a large apartment building?
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
Hello all, after doing tons of research. Close to buying a 3-unit family and then backing out because I did not feel the cashflow amount was worth it. I was thinking about going bigger after watching a bunch of youtube videos. Is it crazy for a beginner like myself to want to invest in a apartment complex say with 10+ units? Also any advice where the best place to invest in something like this would be? If I sell my house I would have about $100,000 in capital to invest in RE with.
Hi @Eric DeVito,
Welcome to BP!
Working with $100K sounds like you should be leveraging your equity against debt mortgages on buying multiple multi family units. Check out Philadelphia and Pittsburgh, they would be a easier buy in for 3-10 units with $100K based on the current appreciating markets within a close distance from where you reside.
Let me know if you have any questions.
Regards,
Joe Scorese
@Anthony Gayden So you bought a 10+ unit apartment as your first investment? Interesting. I don't know anyone who did that. You are the first! Congratulations!
No, I bought a 4 unit as my first deal and bought a second 4 unit 2 months later.
I wasn't a coward and I knew what I wanted.
First of all, congratulations on your remote purchase.
I never called you, or anyone else on BP, a coward. Go back and look at my posts. You are confusing me with someone else.
Regarding my post, about buying local large multifamily property. I stand by it. The reality is a quad is not a large multifamily property. From the perspective of 99% of lender's in the US, it isn't even considered multi-family. Lenders finance it with a mortgage (or deed of trust) in the same way as a single family, just with a 1-4 family rider.
So in the context of this topic, about the Best Place to buy a large apartment building, you can advocate buying remote if you like. I don't. If it is 5+ units, and as the OP said he's selling his house and has $100K... unless he's buying C class property somewhere, he will need financing. Bank financing for 5+ units will require a commercial lender. I know of no commercial lenders that would lend for a large apartment building to a newbie, out of state investor with only $100K. There are three strike (or red flags) in that one sentence!
And, yes, you can get across the country. And FNMA has a small loan program. Fannie Mae defines "Small Loans" as loans of less than $3 million nationwide or less than $5 million in high-cost markets such as New York City and Los Angeles. The good thing is the minimum is only $1M. The bad, is your net worth needs to meet or exceed the loan amount.
As I pointed out in earlier posts, I am in the small/micro MF market at 16 - 50 units. Not that I won't go larger (my partner and I are looking at one in Shelby), but in NC and SC property less than $1M and over $300K seems to be a good spot, where buyers are to big to be small and too small to be big.
@Chris Martin Your made it clear I'm a newbie and I know this already. So that being said what advice can you share if you were in my shoes.
Goodluck to your investment i wish i can do that as well in the near future.
@Chris Martin Your made it clear I'm a newbie and I know this already. So that being said what advice can you share if you were in my shoes.
When I was in your shoes, I stayed local (within about a 1 hr. drive radius) and kept within my means. While I wax maxing out on Fannie Mae loans (10 at the time), I worked on developed banking relationships with commercial lenders in my area. I learned a lot in the first 10 properties. All were SFR asset class. But what fits for me may not fit for you.
So your post: "The plan is to use the VA Loan again locally and house hack, and then use my profits from selling my original home to buy an investment property (preferably multi-unit)." sounds like a plan to me, because those are your words and your vision. You'll need to find a commercial lender if over 4 units, find a suitable property that meets your profitability, and find a trustworthy property manager. All big challenges, IMO. So talk to those folks to get an idea of how your vision fits in with those 3 key parts.
@Anthony Gayden So you bought a 10+ unit apartment as your first investment? Interesting. I don't know anyone who did that. You are the first! Congratulations!
No, I bought a 4 unit as my first deal and bought a second 4 unit 2 months later.
I wasn't a coward and I knew what I wanted.
First of all, congratulations on your remote purchase.
I never called you, or anyone else on BP, a coward. Go back and look at my posts. You are confusing me with someone else.
Regarding my post, about buying local large multifamily property. I stand by it. The reality is a quad is not a large multifamily property. From the perspective of 99% of lender's in the US, it isn't even considered multi-family. Lenders finance it with a mortgage (or deed of trust) in the same way as a single family, just with a 1-4 family rider.
So in the context of this topic, about the Best Place to buy a large apartment building, you can advocate buying remote if you like. I don't. If it is 5+ units, and as the OP said he's selling his house and has $100K... unless he's buying C class property somewhere, he will need financing. Bank financing for 5+ units will require a commercial lender. I know of no commercial lenders that would lend for a large apartment building to a newbie, out of state investor with only $100K. There are three strike (or red flags) in that one sentence!
And, yes, you can get across the country. And FNMA has a small loan program. Fannie Mae defines "Small Loans" as loans of less than $3 million nationwide or less than $5 million in high-cost markets such as New York City and Los Angeles. The good thing is the minimum is only $1M. The bad, is your net worth needs to meet or exceed the loan amount.
As I pointed out in earlier posts, I am in the small/micro MF market at 16 - 50 units. Not that I won't go larger (my partner and I are looking at one in Shelby), but in NC and SC property less than $1M and over $300K seems to be a good spot, where buyers are to big to be small and too small to be big.
When it comes down to it, I don't think it is out of the scope of reality to want to invest in multi family as a beginner. I will not change my opinion so I will have to respectfully disagree.
@John Hickey I will be using the VA loan again to buy a multi family after I sell the home I'm in now. If I want to stay close to home in terms of investment properties perhaps I can look in Newark and PA. Hard to break into NYC market
@John Hickey Way easier said that done my friend.