The 3 Common Misconceptions of Flipping Apartment Complexes
Most real estate investors think that flipping apartment complexes is our of their price range and ability. The entire workflow of wholesaling multi-family units has a resemblance to flipping single family homes, and given the bad assumptions of the endeavor, its easier to take advantage of this niche market of real estate investing. Current market conditions have created circumstances that the educated real estate investor can cash in on.
I'm disabusing you of 3 incorrect assumptions below about flipping apartment complexes...
Myth 1... The investor needs to have perfect credit to flip apartment complexes. False! The investor can have zero credit, and still make the deals happen. How can that be? Because Banks usually do what is called a non-recourse loan on multi-family units. Banks know that individuals don't have the funds and capital to put down even the first down payment on such large deals. The apartment complex is used as the collateral for such loans. The individual's credit record plays no part in the transaction. Only the numbers on the apartment complex matter.
2. You need a lot of money to invest in apartment complexes FALSE! Apartments, as part of the commercial asset class, have a long-standing tradition of being bought with other people's money. The use of limited partnerships and syndicates bringing together private investors to do these deals is very typical. And with the current economy there is no shortage of people realizing the HUGE income potential and tax benefits of investing in apartment complexes.
Myth 3... Apartment deals are tougher to get and close than flipping single-family homes. Not true! They are easier than single family homes. There are property management companies out there hungry for opportunity. Finding buyers for apartment complexes is easy, and because of the prominence of these myths, there is almost no competition for these deals. Most investors are scared off by the huge numbers in these deals. What that really means, is more zeroes in your assignment fee payment.
Take these myths and use them as motivation to start flipping apartment complexes. They are not insurmountable mountains of deals going dead. It's amazing that those non-existent obstacles have created a vacuum for real business to get done, for the professional and informed real estate investor. - 23208
I'm disabusing you of 3 incorrect assumptions below about flipping apartment complexes...
Myth 1... The investor needs to have perfect credit to flip apartment complexes. False! The investor can have zero credit, and still make the deals happen. How can that be? Because Banks usually do what is called a non-recourse loan on multi-family units. Banks know that individuals don't have the funds and capital to put down even the first down payment on such large deals. The apartment complex is used as the collateral for such loans. The individual's credit record plays no part in the transaction. Only the numbers on the apartment complex matter.
2. You need a lot of money to invest in apartment complexes FALSE! Apartments, as part of the commercial asset class, have a long-standing tradition of being bought with other people's money. The use of limited partnerships and syndicates bringing together private investors to do these deals is very typical. And with the current economy there is no shortage of people realizing the HUGE income potential and tax benefits of investing in apartment complexes.
Myth 3... Apartment deals are tougher to get and close than flipping single-family homes. Not true! They are easier than single family homes. There are property management companies out there hungry for opportunity. Finding buyers for apartment complexes is easy, and because of the prominence of these myths, there is almost no competition for these deals. Most investors are scared off by the huge numbers in these deals. What that really means, is more zeroes in your assignment fee payment.
Take these myths and use them as motivation to start flipping apartment complexes. They are not insurmountable mountains of deals going dead. It's amazing that those non-existent obstacles have created a vacuum for real business to get done, for the professional and informed real estate investor. - 23208
About the Author:
Michael Kimble is a successful real estate investor, specializing inWholesale Real Estate, and has 7 free marketing systems for other investors. Go there to sign up for them right now.
posted by X - Men @ 3:12 AM
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