Michael Blank
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What’s The Most You Can Pay For An Apartment Building?
A deal comes in for a 12-unit apartment building from one of your brokers. He faxes you a rent roll and a list of expenses. The asking price is $575,000, and he’s asking for what you want to do. It’s relatively easy to answer the question “is this a deal?” (the answer is usually “no=”), the harder question to answer is “what is the most I would pay for this deal and why?” When I first got started with analyzing apartment building investment deals, it took me about 4 hours to answer this question. This is extremely time consuming, and…
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Quickly Analyze Apartment Building Deal Using 50% Rule
A deal comes in for a 12-unit apartment building from one of your brokers. He faxes you a rent roll and a list of expenses. The asking price is $575,000, and he’s asking for what you want to do. It’s relatively easy to answer the question “is this a deal?” (the answer is usually “no”), the harder question to answer is “what is the most I would pay for this deal and why?” When I first got started with analyzing apartment building, it took me about 4 hours to answer this question. This is extremely time consuming, and when you’re…
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How To Retire Early Investing In Apartment Buildings
We all work hard at our J.O.B., don’t we? We work hard each day and hope to retire when we’re 65, that’s the American dream, right? Many of us are looking for something better, maybe a scenario where we can retire earlier or perhaps enter a state of semi-retirement. The answer: investing in apartment buildings. Imagine working really hard to find a good building at a fair price, putting the financing together, and hiring a property manager to run the whole thing. Was that a lot of work? Of course. But don’t you work hard anyway? Here’s the difference…. Apartment…
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How Do you Know if an Apartment Building is a Good Deal?
You’re interested in apartment building investing and you see a bunch of multifamily properties for sale on loopnet. Maybe you’re even (yikes) thinking of making an offer. But how do you know if the asking price is reasonable? And if it’s not, what price makes sense?How do you know if an apartment building is a good deal? In this article, I give you the 3 main indicators and rules of thumbs to find out.The 3 Main Ratios for Valuing Commercial Real EstateThere are 3 main ratios for estimating the value of an apartment building. Here they are:Capitalization Rate (aka the…
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4 Rules Of Thumb For Apartment Investing When It’s OK To OVERPAY
We’re taught that we should never underwrite an apartment real estate deal based on future performance, always on current performance. This is great advice, but sometimes it doesn’t match reality. Here’s an extreme example to make my point: what if you’re looking at an empty 10-unit apartment building?Technically, the net operating income (NOI) is actually NEGATIVE and if we apply a cap rate to that, the seller would need to pay YOU to buy it.But we all know that’s just silly.Sometimes we have to break the rules because sometimes they just don’t work in ALL situations. While many of us may not be looking for empty shell…
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Why You Should Raise Money To Buy Apartment Buildings
If you read my REI Club blog post “Invest In Apartment Buildings To Retire Early”, you were probably saying to yourself, “That’s great, Michael, I’ll just keep buying as many units as I need, and then I’ll be set. But I don’t really have the money for all this.”This is a good objection, but only because you don’t know any better!The truth is, you don’t need a ton of your own money or even good credit to get started with buying apartment buildings. The answer is to raise money from private individuals.The process of putting together deals with other people’s…
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Invest In Apartment Buildings To Retire Early
Why Investing in Apartment Buildings is the Single Best Way to Retire EarlyImagine if you could do a single apartment building deal and retire from your J.O.B?Imagine working really hard to find a good building at a fair price, putting the financing together, and hiring a property manager to run the whole thing. Was that a lot of work? Of course. But don’t you work hard anyway?Here’s the difference.Imagine the day you close on the building and your property manager takes over. Ask most apartment building owners, and they will say they spend anywhere between 2 and 5 hours per…
