I’m curious to hear perspective from those who have invested in apartment buildings ($1M+) or are educated in this area:
- If you were starting all over again, assuming you had zero experience (never done a real estate deal) but all the necessary cash... i.e. you can get a $2M building either with leverage or pay cash... would you do an apt building as your first deal?
- How much cash flow can you reasonably expect to pocket from let’s say a $1M to $2M building?
- Does it make sense to own and hold just one apartment building and stop there? (Or are you always looking to get into more and more deals like the one you just got?)
2. It depends. Purchase price alone is not enough to estimate cashflow.
3. One is just the beginning and clearly is not enough
1) you can buy an apartment building as your first deal. You just need to get educated on how to do it and/or partner up with someone experienced.
2) don't buy it all cash. Use leverage instead. If you do have extra cash - invest in multiple buildings and always get a loan. It will increase your return on investment and give you some expenses to write off on your tax return.
3) returns will vary depending on the area, the investment details and your expertise to manage it.