3 Ways Apartment Complex Investing Could Change Your Life (+ a Special Invite for YOU)

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Perhaps the greatest decision I ever made was buying my 24-unit apartment complex.

That said, it wasn’t a hard decision to make. I knew apartment complex investing was going to be in my future, but at 24 years old, I didn’t realize I would have hit my goal so quickly. But I’m so glad I did! That 24 unit apartment complex has given me the opportunity to live an extraordinarily incredible life over the past five years, allowing me to quit my day job, travel often, volunteer at my church, and become a leader here at BiggerPockets.

Of course, it hasn’t always been easy, but it’s been worth it. I love my apartment and look forward to many more deals in my future.

If you are interested in apartments, great! If not, hopefully this post will convince you to at least take a look. The following are three reasons I love apartment complex investing. But first…

Webinar PNGI want to invite you to a special webinar I’m doing THIS THURSDAY all about apartment complex investing. It’s called “An Introduction to Investing in Apartment Complexes,” and my goal is to help give you a huge overview of the process of finding, financing, and building wealth through apartments. To sign up, just click here

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And now, back to the post…

1.) Ability to Create Wealth

When’s the last time you built something out of thin air? It’s tough, right? But with apartment complexes, that’s exactly what you are able to do. Build something out of thin air: wealth.

Related: How We Took Our First Commercial Property From Vacant to 18 Tenants

You see, when you buy a single family house, the value will only ever be worth what other similar homes have sold for. There’s not a lot you can do. However, apartments are valued differently. Apartments are valued using the profit that is generated, which can be increased! The more profit you make, the greater your property is worth.

To learn more about this process, be sure to read “What is a Cap Rate? (Capitalization Rate).”

2.) Ability to Scale

Buying 100 single family houses is tough. I’m not saying it’s impossible, but it would be difficult. It would require 100 separate transactions, hundreds of offers, years of searching, and 100 different loans — if you could even obtain those loans (most banks cap investors at four residential loans.)

However, buying 100 units in an apartment complex could be done in just ONE transaction.

This is the concept of “scalability,” meaning it’s easier to grow larger and larger without increasing your efforts significantly. Apartment complexes give you the ability to bypass the residential rules and scale through commercial lending… and I love that!

3.) Ability to Outsource

Finally, apartment complexes (especially larger ones) assume that most tasks will be outsourced.

In other words: more passive income!

They are designed by their very nature to be a mostly passive investment for the investor. Houses and small multifamily, on the other hand, tend to utilize a lot more “hands-on” interaction. Of course, you could choose to outsource everything with the smaller properties, but it can be tough to find a deal good enough to allow for such delegation.

With apartments, delegation is assumed and required! There is no way you are going to be able to do the leasing, maintenance, advertising, etc., so you purchase the investment with that concept budgeted for, and you are competing with others who are doing the same.

Related: Buy With Confidence: A Brief Guide to Due Diligence for Apartments

Conclusion

Apartments have difficulties and challenges, of course. But I believe they are perhaps the single greatest investment you can make in real estate if your goal is to create BIG wealth.

Do you want to create BIG wealth?

Of course, this post was just a taste of the benefits to apartment complex investing. BiggerPockets is full of great content surrounding the topic of apartments, so dig in!

I’d also like to invite you, one last time, to the webinar I’ll be doing THIS THURSDAY on this very subject. We’ll be going MUCH deeper than what I covered in this post. I hope you can join me!

Click the button below to sign up, and be sure to leave a comment at the bottom of this post as well. Let me know your thoughts on apartment complex investing.

What other benefits are there?

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About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.

9 Comments

  1. Brian Burke

    I’ve bought 100 rental houses, and I’ve bought apartment complexes. Which is easier? Brandon is right…Apartments, hands-down. But buying apartments is a whole different ball game than houses. Don’t try it without getting an education first. This webinar sounds like a great place to start.

  2. Leonid Sapronov

    Brandon, not 100% true about 100 single families. Provided you have the means, you can do a package deal or buy another investor’s portfolio in one transaction. Granted, not everyone can do that, but it’s totally possible if you can find that deal. Finance it with a commercial loan and voila – one transactions and you’ve added several single family homes to your portfolio. It may be 10, it may be 100. 100 will definitely be harder, because you still have to do your due diligence on all those houses, but I think it’s good to keep this type of strategy in mind.

  3. Wayne Mack

    Great article Brandon! I thoroughly enjoyed reading about your success story especially at such a young age, its extremely motivating

    I have a question though, I am very interested in getting into purchasing commercial apartment buildings preferably 20 or more units. Its the commercial lending that I still need to learn about, I want to be able to take the cash flow from the building and possibly invest into another building but wouldn’t a balloon payment make that difficult? How often does a commercial loan include a balloon payment? And how does the balloon payment effect where the buildings cash flow goes?

    Thanks in advance!
    Wayne

  4. Jerry Rien

    Brandon I wish BP tech could get my cell number added so I could sign up. Have asked repeatedly and get a text they are correcting it, but so far no luck. would like to register for Apt. complex investing but it takes me too the dec. 21 webinar. Hopefully the bugs get worked out one of these days, it is getting frustrating dealing with tech. so far no luck.

  5. Buying an apartment complex is like getting involved in real estate all over it is a different Beast and the rewards are exponential. Take your time buy your five houses and trade it in for the hotel (monopoly), But like Brian said get educated before diving in like any investment you can lose so minimize your risk with education. and you can start here on Bigger pockets.

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