Buying a fully occupied property

[Steven Huang]

Hey everyone!

I've been investing for a year in the Atlanta market, and been buying only residential (SFH-4plex) and I'm looking to purchase a smaller apartment property in the next six months.

My question is this: Is it a good idea to buy a property that is already completely 100% occupied?

I've been told by some that if you buy something that's already performing at the maximum occupancy, you'll be paying top dollar and the only direction that your property value can really go is down if you mess up and end up losing tenants, since you don't have room to add value by increasing occupancy. (Ignoring cap rate compression, and assuming rents are already at market levels, and that the seller's managing expenses well)

On the flip side, getting a loan for a 100% occupied property from a bank is easier than a non-performing asset(considering that I'm a foreign national and getting financing is already hard enough), and there's an easier transition into the apartment world for someone who hasn't worked on that scale before.

What are your opinions?