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…
I 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.
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.
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.
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?