The Top Ten Reasons Why Now is a Great Time to Buy an Apartment Building

  1. Prices are Falling —  Prices for apartment buildings are steadily dropping.  Many apartment building owners paid way too much for their properties over the past few years and now their properties are worth less than what they owe.  Apartment buildings are starting to show up as foreclosures across the country and it is further pressuring prices to the downside.
  2. Forced Appreciation — You don’t have to wait for real estate prices to go back up to increase the value of your apartment building investment.  You can increase the value of you apartment building by increasing the rents, cutting your expenses or by making physical improvements on the property.
  3. Less Competition — Many investors are under the false impression that owning an apartment building is more difficult than owning single family homes, therefore there is less competition for prime properties.
  4. Leverage —  Investing in an apartment building allows you to leverage a large amount of real estate with one transaction.  Compare that to single family homes which require closings for every unit.
  5. Low Risk — Beginning on the first day ownership an apartment building gives you a steady and reliable stream of cash flow every month.  What other business can promise this?
  6. Strong Demand — According to the US Census a full 1/3 of the US population depends on rental housing for their residence.
  7. People Need a Place to Live — No matter how bad the economy gets, people will still need a place to live.  With foreclosure rates rising, the number of people looking for affordable housing will at least remain steady or increase.
  8. Financial Security —  For a long term investment it would be difficult to find anything better than an apartment building in a great location.
  9. Financing — Of all commercial property types, apartment buildings are eligible for the best and easiest financing terms.  It is still possible to finance 85% of the purchase price on an apartment building and it is even possible to structure an offer with a limited partnership that will allow you to put up even less money.
  10. Wealth — There has never been a better time to get rich in commercial real estate than right now for all of the above reasons. We know #10 is really just a recap, but without it we wouldn’t have a top 10 list! (and wealth is why we’re investing in multi-families anyway, right?)

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