I want to get into investing in apartments. what steps should I take in doing this as a beginner?

In Buying Property - Asked by Allieu B. - Sep 15, 2009
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Answer(s)

Andrew P.
Broker/Agent
Park Ridge, NJ

Step #1:
Avoid any person requesting a sizable deposit into his bank account before commencing the business relationship.

Sep 15, 2009
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Davide P.
Broker/Agent
Pinole, CA

The primary neccessity nowadays is down payment - usually 25-35%. Once you have money saved up, really the best thing to do is educate yourself. Figure out what area you want to invest and up to what price. After that, it's a matter of knowing which property property gives you the most desired cash flow. You should probably work with a local CCIM who can explain in an hour what would take me much longer to type up.

Sep 15, 2009
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Eric D.
Broker/Agent
Fairfield, CA

Talk to a seasoned investor and seek their advice and knowledge. Or if you don't know any experienced investors, contact a commercial brokerage and ask for an multi-family investment broker. Another option would be to contact City staff (economic development department) in the areas that you are looking.

Sep 15, 2009
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Brandon J.
Broker/Agent
Houston, TX

take the IROC classes at your local apartment association

Sep 15, 2009
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Steve M.
Owner/Investor
Plano, TX

Allieu, just be careful of any gurus that promote themselves as the leading expert in taking would-be investor's money- uhh- I mean teaching people how to invest in apartments. Some are successful and have actually sold properties for a profit, some have not. Many have good information to share but there is no Golden Ticket.
Go to amazon.com and search on multifamily and apartments- buy the books and read them- that is a good start. Crunch numbers on every deal that comes out on loopnet in the area that you are targeting and that is in your budget range or even a little outside of it. Talk to brokers, lenders, other investors. Get the real owner's numbers on deals and create a database of actual reported income and expenses for your target area, age of property, location, mechanical configuration, and type of build. Categorize them and know them well. Don't rely on broker proforma numbers, many are still waiting for those numbers to come true years after their purchase.
I spent two years learning and looking before I closed on my first property. I thought I was ready and in hindsight I think I was but I learned more in the first year of actually doing it then I could have learned in 20 studying it from the outside. The point is that you need to educate yourself first, get comfortable with your market, and then get serious about an actual purchase. I strongly suggest investing locally if you are going to do it alone, otherwise invest with a local operator that has a good track record. I read at least 10-12 trade magazines a month even today, almost 9 years later.
Good luck with your investing.
Steve
steve@mb35.com

Sep 15, 2009
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Greg K.
Broker/Agent
Elk Grove, CA

Depends on whether you are an investor or investor/manager. If you are an investor, take a look at some REITs or local/regional private equity investment firms. The former will be more predictable, the latter highly variable. Private equity firms are only as good as their reputations; you're likely to have better luck with a firm that has a long tenure and good management. They can be hard to find as most investment advisors and CPA's (the better referral sources) seldom recommend them, partly because it is difficult for them to earn a fee.
If you plan on being a direct owner, you should probably consider being a hands-on manager as well. Though there are many property management firms that would be willing to manage for you, not all will have the same interest in a successful property as you; again, referrals and reputation are critical. Still, the best way to insure thebest results is to manage yourself, and the best way to do that is to get educated in property management. You should find and become a member of a local or regional apartment owners association. All provide very good resources, information and education.

Sep 21, 2009
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Gregory G.
Broker/Agent
San Francisco, CA

Find a broker you can trust and then put your financing together.
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Gregory Garver - Commercial Real Estate Broker
Broker License# 01716531
(415)225-9894
gregory.garver@gmail.com

Oct 23, 2009
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