Need advice purchasing 14 unit apartment building.

5 Replies

Hi, everyone I need some help. I have been looking at properties and trying to educate myself for about the last year. I had decided on properties up to 4 units, with a purchase timeframe within the next year from now. I stumbled on a listing for an apartment building that has 14 units. They haves  it listed for 300k. Here are my issues/questions:

Issue 1: As I said I was planning on buying within the next year so I am not financially prepared with the 20% down required to finance 300k. I can have 10% saved in the next 4 months if I start now. 

Is there any method to finance 100% now?

I have a gross income of 90k and a 713 credit score. I sold my home in August and am currently stationed overseas with very limited expenses.

Issue 2: I am stationed overseas. My family would have to inspect the property and be my eyes on the ground there for up to the next 2 years.

Issue 3: The property has been owned and done managed by a local couple. Their records keeping is not good, and I’ve had issues getting exact data. 

Question 1: How would I vet a management company from overseas?

Question 2: Would a management company handle the maintenance?

Question 3: How do I know it’s a deal worth making as my 1st investment or should I stick with my original plan of a 4plex to get started? 

The only reasons I am considering this property is it’s location. As well as the fact I know for sure this area is lacking in small apartments so the demand for tenants is present. 

Any advice on who to talk to or if I should even be considering this deal would be greatly appreciated. I have all the data they have sent me and would be willing to share with anyone willing to provide guidance. Thank You in advance! 

A management company would handle the maintenance and oversee and minimize expenses. I don’t believe you will be able to get 100% financing. Wound love to look at the deal and help out more if you want to message me the details. Also I’m always looking to invest in case you need a partner. I’m a property manager here in Austin Texas.

@Aimee Wells you could probably finance it through a short-term, hard-money lender if the numbers make sense. You'll pay a much higher interest rate but then can refinance with a traditional lender after a short time.  I would only consider this if it's a slam-dunk purchase. Because the owners can't provide solid data, I would be very cautious about taking that risk.

Even if your family "evaluates" the property for you, I would still recommend a second set of eyes. I can't speak for other Property Managers but I have evaluated properties for buyers in the past. I know the market better than they do, I know the things to watch out for with multi-family, and I can talk to the seller (or their agent) face-to-face and have better luck getting information.

The difficulty is that you don't have a relationship with a Property Manager so it may be difficult to find one willing to work for you and capable of performing the task. I normally refer people to but I just searched and there is only one property manager listed for Iowa.

If you think it is a slam dunk, get it under contract where you can assign it to someone else.  Then find a partner who can help you close the deal.

As for vetting a property management company, that can be done over the phone and also through online reviews. 

Thank You everyone for the support and advise! I definitely will be having a professional look over any property I choose to look harder at. My family will more be my eyes on ground for initial evaluation much the same as I would do if I were there. Thank You again! 

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