Is “no partners” realistic?

Question

I’m interested in owning apartment building(s) for cash flow but not in working with investors.

I’d like to own my own buildings and not have other stake holders who are owners.

Anyone take this approach?

How much does this limit my ability to grow past one building?

(Assuming all of your initial investable funds go into purchasing your first building and you don’t want to use private OPM to go past that.)

Jeff Kehl · Answer

@Mark Costa sure you can, it's just slower and harder. I've built a portfolio of over 200 units without using partners or investors. But I probably could have done much more if I was able to get over fear of risking other people's money.

Theo Hicks · Answer

Without partners, you will be responsible for funding 100% of the down payment. So, your growth is limited by how quickly you can fund down payments. Additionally, as @Nick B.mentioned, you will need to continue to meet the net worth and liquidity requirements in order to qualify for financing. But, you could bring on a partner who's only responsibility is to sign on the loan with you. You'll be working with someone else and will have to compensate them, but you technically aren't working with an investor.

Andrew Syrios · Answer

It's certainly doable, but you'll need money in all liklihood. It's hard (albeit not impossible) to finance all of the purchase on an apartment.

Bjorn Ahlblad · Answer

Partnerships get discussed a lot as a potential strategy. I would not be surprised if a large number of investors own one or more apartment buildings with no partners other than a bank or other lender.

Nick B. · Answer

Depends on the amount of capital you have. You maximum loan amount is limited to your net worth and you have to have 10% of the loan amount liquid after the closing.

So, if your net worth is $1M of which you have $400K in cash, you can get a $1M loan that would allow you to purchase $1.3M worth of apartment complex (75% LTV, $300K down, $100K post closing liquidity)

Is “no partners” realistic?

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