Two Reasons Apartment Investing Should Not Be Feared
With so much attention on how the economy has suffered recently, you might believe that it is a bad time to invest in real estate. You've probably heard something like "the housing bubble has burst" or something else negative and pretty much discounted the notion of real estate investment. "Where would I even get the money?" you might think. While it might not be the best time to get into single family housing, have you ever thought about apartment investing? Multifamily is one of the most overlooked areas in real estate. However, it's not as crazy of an idea as you might think.
Apartment investing is one of those things that just seems astronomical to the common person. They think that it takes millions of dollars to get a property like that and they would never be able to get the money. While it is true that it's difficult to get money for single family houses, its a misconception that you can't get money for apartments. In fact, it's easier than you might think to get the money you need for an apartment. You just have to know where to look and who to ask.
Multifamily real estate is a great area to get into because there's really not that much competition for the properties. When you find a good deal on a single family house, there will probably be several other investors ready to make the deal as well. They think the same way you're used to thinking. They believe that its a safer investment because you only need to borrow a little amount of money. It's a figure that they can get their head around without stretching very much. It's well within their comfort zone. However, apartment investing is a different type of transaction.
Interestingly, it's often times easier to borrow money for larger transactions than it is for smaller ones. Getting out of the comfort zone to analyze apartment deals is often times as simple as adding a couple extra zeros to the analysis. But this keeps many investors away even when the math behind the deal makes perfect sense.
It requires most people to get out of their comfort zone, which is usually a losing proposition. Although it might be scary, the leverage you gain from an apartment is huge. The price per square foot that you are paying for the property is much lower than if you bought a single family house. However, you now have several units that you can rent out. This creates a huge amount of cash flow for a relatively low initial investment.
Understanding the enormous potential of apartment investing to generate cash flow and equity with lessened risk and economies of scale is the key to creating inter-generational wealth. Getting past the fear of large number is usually the first step. Luckily, it's an easier step than you might realize. - 23199
Apartment investing is one of those things that just seems astronomical to the common person. They think that it takes millions of dollars to get a property like that and they would never be able to get the money. While it is true that it's difficult to get money for single family houses, its a misconception that you can't get money for apartments. In fact, it's easier than you might think to get the money you need for an apartment. You just have to know where to look and who to ask.
Multifamily real estate is a great area to get into because there's really not that much competition for the properties. When you find a good deal on a single family house, there will probably be several other investors ready to make the deal as well. They think the same way you're used to thinking. They believe that its a safer investment because you only need to borrow a little amount of money. It's a figure that they can get their head around without stretching very much. It's well within their comfort zone. However, apartment investing is a different type of transaction.
Interestingly, it's often times easier to borrow money for larger transactions than it is for smaller ones. Getting out of the comfort zone to analyze apartment deals is often times as simple as adding a couple extra zeros to the analysis. But this keeps many investors away even when the math behind the deal makes perfect sense.
It requires most people to get out of their comfort zone, which is usually a losing proposition. Although it might be scary, the leverage you gain from an apartment is huge. The price per square foot that you are paying for the property is much lower than if you bought a single family house. However, you now have several units that you can rent out. This creates a huge amount of cash flow for a relatively low initial investment.
Understanding the enormous potential of apartment investing to generate cash flow and equity with lessened risk and economies of scale is the key to creating inter-generational wealth. Getting past the fear of large number is usually the first step. Luckily, it's an easier step than you might realize. - 23199
About the Author:
To see how to take advantage of the opportunities in apartment investing, come hear Carlos Vaz tell his story of how he became a multifamily millionaire at age 31 after only 12 months.
posted by X - Men @ 2:42 AM
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