How to buy your first apartment building? Are you ready to get your own apartment
building? There are definitely some hidden gems in the apartment building
world. It's a great place to start investing. But there's a few tricks that
I need to tell you so that you don't get all tripped up.
I'm going to explain to you the entire apartment buying process step by step so
there's no surprises for you. So, apartment building investing is
actually one of the big deals right now. There are so many people talking about
it. But very few people actually doing it. So, when it comes to apartment buildings,
I actually was pretty late to the game. I actually started investing in real
estate while I was still working my boring corporate job. I started investing
in real estate in 2002, 2003. I actually made the worst mistake ever. Didn't know
what I was doing. And I lost everything in 2009 when the whole economy crashed. I
ended up living back in my parents basement with my husband and my kids.
Broke, bankrupt, foreclosed and pretty much a loser. So, I kind of turned that
around by getting myself educated and I started investing in real estate. But I
was investing in just single-family homes, okay? I have figured out how to
start wholesaling then I started fixing and flipping. Then I got some rental
properties and I got enough rental property income so that I could quit my
boring corporate job and live the life that I wanted to live. However, that was
not the end of my story and I'm going to tell you the biggest mistake that I made
was as I was you know investing in real estate and I have these great rental
properties, I have all single-family homes, okay? In fact, at one point, I had
over 40 of them. And so, this sounds amazing and the income was really good.
But I'll be really honest with you. It was a big hassle. There was a lot of work
in managing all those single-family homes.
Remember, every single home has its own mortgage, its own taxes, on insurance, its
own utility bills. Has to get the grass cut like there was just so many things
that went along with each property. And so, as I've gotten in the past few years
investing in apartment buildings and in multi units, I cannot believe how late I
was to the party and all of the benefits that I was missing out on. Like I said,
for one, you don't have to manage all of those properties individually and have
expenses at all of those different properties. The next thing, I realized
that the risk on apartment buildings were actually lower than on
single-family homes. For example, if I have a 10 unit and old and
the units is not occupied... Or even 2 of the units are not occupied, that's 20%
not occupied and 80% occupied. But on my single-family homes when I had one
property and the tenant wasn't able to pay or they... You know, something happened,
I had a 100% vacancy rate which is not good. That means 0% occupied.
Zero income. And so, I realized really quickly that's a problem in apartments.
And apartment buildings have changed the game on that. Additionally. Once you have
apartment buildings, you can have one property manager managing that building.
And it's a lot easier than having multiple property managers managing
multiple different properties all over. You know, one by one by one. And so, I just
found that there were so many benefits to apartment buildings and I'm just so
happy that you guys have stumbled across this because you are on the right track.
So, let me get to the meaty fun stuff of apartment buildings. So, since you are now
trying to get your first rental property apartment building, you are definitely on
the right track. But I'm going to give you one little caution. If you have never
invested in real estate before and you have not actually had a rental property
even a single-family property like I had, you probably are not equipped to start
with a big apartment building, okay? You probably do not want an apartment
building that has 100 units or 200 units. I know there are lots of
gurus out there and people other people on YouTube that may tell you to do
differently. But Noelle has a lot of experience in this over 18 years
experience. Additionally, I have a master's degree from Penn State and
economic development and I have my MBA from Baylor. So, I'm not saying any of
this to brag. I'm saying this to tell you that I have a lot of information. I have
a lot of real-world experience and I'm telling you, if you just jump in and you
start to big and you go to these big units, you probably are going to get
gobbled up and lose money. So, let's start with how you should start. Since this is
your first apartment building, I suggest you start small, okay? So, let's talk about
what that means because there's tons of apartment buildings that you could get
but you don't want to go too big. You should probably get something that is no
more than 10 or 12 units. In fact, there's lots of units like 8 units and 6
units. When it comes to apartment buildings, I'm talking about units 5
and more, okay? 5 units and above. If you are talking about a 1 to 4 unit
multi-unit property, that's not an apartment building, that's not what I'm
talking about. I'm talking from a commercial standpoint, the true
definition of an apartment building. Commercial real estate residential is
5 units and up. So, if you can find a 5 unit, awesome. I actually haven't
actually found any 5 units before but I have found some 6, some 8, some
10's and 12's pretty easily. And that is probably where you should start, okay? Do
not get more than 12 units just because it's going to be probably too expensive
for you. It's going to be a lot for you to manage. And then when you get all of
the documents which I'll talk about in a second, there's going to be a lot for you to
look at. So, you don't want to go too big where they just start sending you all
you know hundreds and hundreds of pages of PDFs. You want to just see where they
have for the past year for just maybe 8 or 10 or 12 units. No more
than that. The second really important thing when it comes to buying your first
apartment building is choosing a location, okay? You want to choose the
right location for apartment buildings. The great thing about it is apartment
buildings are growing. There's more and more people building them. But when you
first get into an apartment building and investing if this is your first one, you
know, you've stumbled upon this video. Then you probably are not going to be
building your own apartment building. That's a totally separate thing. I can
tell you about that. It's a really big headache. I actually have a billionaire
well as soon to be billionaire friend who has skyscrapers in New York City and
all this other stuff. And it really can get complicated when we're talking about
big, big units. So, when we're talking about just a 6 or 8 unit apartment
building, you're going to probably be in a major city, okay? So, I know sometimes
there are some apartment buildings that are way out in the suburbs or way out in
rural areas. That's probably not where you want to go. Whatever state that you
are in, you're probably near or not too far from a major city, okay? So, using for
example, Texas. You have Dallas, you have Houston, you have Austin,
you have San Antonio. You have a lot of major cities and you want to be
near a major city or in a major city. You don't have to be you know in the major
city but you want to be near when we're talking about apartment buildings. And
the reason this is, is because apartment building investing is really all about
the population, okay? So, the more people that you have in an area and the more
growth that that area is experiencing, okay? So, the more people that are moving
there, the better it is for you as a real estate investor. So, you want to go ahead.
And again, I made an entire video on how to find the best places. I'll put a link
there below for you so that you can get to that video as well. But you really
want to choose places that more people are moving in than are moving out. And
you don't want to be in rural areas. If you live in a rural area, then you
probably want to find a less rural area, a more urban area to start investing in
your first apartment building. Another important thing once you have chosen
your location, making sure that you know your market, okay? Make sure you know the
market that you're investing in. You should know what the population growth
rates are. You can google this stuff. You should know what the unemployment rate
is, you should know what the crime stats are. Does this place have a ton of crime?
You should know your market before you actually buy that property. So, that's
another thing that you want to look at and make sure that you know. So, now that
you've picked out the location, you feel like you know the market, the next thing
is you're going to review the documents. So, when you are looking to buy a
apartment building, before you actually buy the property, you get to see the
documents, okay? You can put in a letter of intent as long as you've been
pre-qualified. They have to submit to you the documents. In fact, most small
apartment buildings, they'll own mostly on the apartment, not you, okay? That's the
great thing about commercial residential real estate, is that they look at the
profitability of the building. They look at the rent rolls. They look at the t12.
The t12 are the trailing documents for the past 12 months on the property, all
of the invoices, all the expenses all of the things that they had. They'll
show you the rent rolls. What have people been paying? What tenants have been
paying? When they paid? How much they pay? The rent
rolls. It's super important that you review these documents. And the great thing
about it is when we are talking about apartment buildings, they almost have to
show you those things otherwise you're not going to be able to acquire
financing. So, people that are selling apartment buildings, they should know
this already. If you're dealing directly with the private seller and he's not
providing you those things, then you should probably walk away. You need to
see the documents. Okay. So, I have a 3-day training that I would love to invite
you to where I'm gonna train you for 3 full days you get to meet me in
person. Small class, not too many people. You know, it's not many hundreds of
people in the class. It's going to be a small class. I'm literally going to take
you to my properties and show you exactly how we do this and teach you
everything that you need to know. So, when you leave after 3 full days of
training, you have your full plan. You know exactly how to invest in real
estate and you are ready to go. Please go to Grow Your Wealth Event. That's 4
words. Grow, your, wealth, event, ".calm". And check it out. Please start to get your
tickets. I can't wait to see you in person.
I would love to train you answer all of your questions in perso.nMmaybe even go
to lunch with you. This is Noelle. To your success.