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Why Apartments are Still a Great Strategy for Investors PDF Print E-mail
Written by David Lindahl   
Monday, 01 March 2010 19:37

Apartment Buildings are still a Top Choice for Investors


With the chill beginning to lift ever so slightly from the real estate market, investors are beginning to emerge from hiding. There are many opportunities out there. Banks have been foreclosing on properties at an unprecedented rate and vacancies in some municipalities continue to rise. For some would-be real estate speculators, the lure of these vacant homes is tough to resist. After all, a house that was selling for half a million dollars five years ago might be on the block for under two hundred now.

In severely depressed areas, hard hit by manufacturing shut downs, homes can be had for ten thousand dollars or less; some are being sold for the amount owing in property taxes! Buying one of these houses can be a risky business, though. Some have been severely damaged by former owners or even squatters, while homes that have sat vacant for months may have suffered from lack of maintenance. The cost of fixing some of these homes up may end up being substantially more than you bargained for. Then there’s the difficulty of selling a home in a neighborhood that has vacancies. Prospective buyers might be frightened off by the instability.

An alternative that some canny investors have begun to catch onto is apartment buildings. Right off the bat, there’s one part of the equation that should immediately make sense: if so many people are abandoning their homes, where are they living now? Bingo. Many former homeowners are becoming renters again, meaning there is demand out there for rental units.  While many people mistakenly assumed that no money down financing would not be available for multi-unit dwellings, smart investors have realized that they can apply many of their same single family money saving finance strategies to apartment buildings.

One of the best parts about opting to buy an apartment building versus building a portfolio of single family homes is the economy of scale that applies to many of your expenses. With your investment limited to one address instead of multiples, there is less running around for you. Maintenance costs, insurance and even taxes are typically lower on a per unit basis. And with a growing pack of investors circling the nation’s foreclosed homes and bidding up prices, you will face far less competition when searching for an apartment building to invest in.

The demand for rental units is still growing and the future marketability of the homes these new renters have left behind is uncertain. Why not take care of all the variables and invest in the apartment buildings they move to instead of the homes they lost.

Apartment Buildings Expert and Speaker, David Lindahl has helped thousands of investors become Apartment investors, literally letting other people pay their mortgage!

 
How to Create Passive Income without Hassling with a Single Tenant! PDF Print E-mail
Written by David Lindahl   
Friday, 26 February 2010 19:22


The true goal of every investor should be to create as much massive passive income as soon as possible.

Passive income means just that, money that comes into your house month in/ month out without you having to do a thing to get it. How can you accumulate massive passive income quickly?

Well, if you went out and bought a couple dozen single family houses and kept them, you would create a decent income. Good but not great.

Its’ going to take you a little time to find all of these deals and then you would have to manage all of those tenants.

What If You Put a Couple Dozen Units in the Same Property?

Then you would only have to find one deal and then a few more to create a great passive income.

I know what you’re thinking. Oh no, not apartments! I don’t want to deal with the tenant hassles! And I agree with you, you shouldn’t be dealing with any tenants, wouldn’t it be better if you could just sit back and collect checks while someone else deals with all of the management headaches?

Those people are called management companies and they make a living shielding investors from the day to day management of their properties so you can go out and continue to do what you do best, find more property and create more cash flow!

But Aren’t They Expensive?

It’s true that management companies are paid a percentage of the gross collected rents, somewhere between 6% and 10%, though if you factor this cost into the deal, as long as the property cash flows with these fees, you’ve got yourself a winner!

Not only have you found a property that will get you one step closer to true freedom, you don’t have to hassle with a single tenant.

But Don’t the Management Companies Nickel and Dime All of Your Profits Away?

While it’s true that there are some bad management companies out there, you can be assured to find a good one if you follow these simple steps.

Go to www.irem.com. That’s the Institute For Real Estate Management, a great resource. When there, go into the search box and search for a Certified Property Manager (CPM).

These are owners and managers who have taken time out of their busy schedule and taken a series of required courses to improve their management knowledge and skills. Upon the completion of these courses, they take a big test and then they are awarded the CPM designation.

These managers are the cream of the crop and these are the ones that you want to have managing your properties. They will send you a summary report each month, telling you how the property is performing and the only thing you have left to do is to go cash you’re checks while you’re out finding more properties for your portfolio!

David Lindahl is the nation's leading authority on investing in Apartment Buildings. He has helped thousands of students invest in apartment buildings to build wealth

 
Why Invest in Apartment Buildings? PDF Print E-mail
Written by David Lindahl   
Friday, 26 February 2010 19:18


Now is a great time to purchase real estate! Let's face it; we are now living in a buyers market. With more and more properties on the market, sellers are facing some stiff competition, and are being forced to lower their prices in order to contend with other hungry sellers. This leaves ambitious buyers with a great opportunity, however, while timing could not be more perfect to buy your first piece of real estate, it is vital to know what kind of property is going to best maximize your profits. After all, the goal of investing in real estate is making as much money as possible, while spending little.

When most people think about investing in real estate, the first thing that comes to their mind is duplexes and single-family homes. This is because many people are under the false impression that certain money saving strategies like fix and flip, and no money down is only available when buying single-family units. In fact, these same options are available when purchasing multi-family units like apartment buildings. In reality, purchasing an apartment building is often the smarter, and most cost effective choice. An apartment building can be easier to occupy, less time consuming, and can also be the most efficient way to maximize your profit.

With the demand for houses increasing in today's buyers market, developers are continuing to build more homes. As we all know "demand" gives these developers the power to price these new properties as they see fit, and that price is more than likely going to be high, however, many people cannot afford to pay the $1,200.00 mortgage that comes along with the increased price of the home and look to a more affordable way to live. In this case, apartments, with their lower monthly rent, become more appealing to buyers.

Lets not forget, that the potential for increased demand in these apartments, can increase the cost of rent, because with even with an increase in the amount of rent that needs to be paid per month, the gap between mortgage payments and rent is still quite large, leaving apartment buildings as the more affordable option. Don't forget, though, that many people are still caught in the intrigue of owning their own home, and while an apartment can be appealing to a younger crowd, they are not as appealing to those looking to raise a family, or to start their new married life. This in itself is advantageous to you as well as a buyer because while many people are looking in the market for homes, you can be facing less competition in the apartment market.

When you invest in an apartment building, you have the ability to hire someone to manage the property for you. You, as owner of the property, can enjoy all of the benefits of owning the property, while others put in the effort and the work to keep it running effectively and smoothly. While hiring others to manage your property can help to save you time, the ease of having all of your units in one place can also be very efficient. When purchasing several one family units, your properties can be spread out in several different areas. Separate home leads to separate bills, mortgage statements, etc. You, as property owner, would have to spend a great deal of time traveling from property to property to ensure that everything is running as it should be. With an apartment building one stop can lead to all units.

When buying a home, owners' expenses often include taxes, and insurance. These expenses do not cover any maintenance that may become necessary to the property or any other problems that may occur, which could make it necessary for the owner of a home to dig in to his own pocket in order to solve these problems as they arise. However, went renting an apartment building, the expense include maintenance of the property, utilities, management, taxes, and also insurance. This can make the cost per unit of the building less expensive for the owner, which makes owning an apartment building, once again, more cost effective.

Listed above are only a few reasons as to why it is a better deal as an investor to invest in an apartment building vs. a single-family unit. Investing takes a great amount of research, and I would expect you as a homebuyer to do your homework before going out and buying any property!

David Lindahl is the leading authority on investing in Apartment Buildings. He has helped thousands of real estate investing students build wealth thru Apartment buildings.

 




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