The average real estate investor assumes that investing in apartment complexes is expensive and difficult. The process of wholesaling multi-family units is very similar to that of single family homes and much easier to get involved with than most people are aware of. The current economy has created a perfect storm for investors who are educated.
Here are 3 common myths about flipping apartment complexes debunked…
Myth 1… Bad credit means no deal! Not true! Banks actually care LESS about credit scores with apartment complexes. Banks know for a fact, private individuals rarely have the capital and cash needed to even get a downpayment on large multi-family complexes. What they truely look for is using the apartment complex itself as collateral… or also known as a non-recourse loan. The investor’s credit score is NOT a factor.
Myth 2. If you don’t have a huge stash of investment cash, your out of the game. Nope! When investing in apartment complexes, you use other people’s money. You see, apartment complexes are profit creating assets, counting in the commercial asset investing area. Limited partnerships and syndicates pull together sums of capital to invest in them because they build profit right away, and happens every day. It’s a common occurence. Current market circumstances have made apartment complexes great deals for these investors.
3. Apartment deals are more difficult deals than single-family homes. FALSE! It’s quite the opposite. Property management is commonplace. Finding buyers is a snap and the competition is practically ZERO. Don’t let the bigger numbers scare you. It simply means more zeros on your assignment fee checks.
Flipping apartment complexes is incredibly profitable. Dealing with larger profit margins, an abundance of buyers, and using other people’s money makes it the perfect opportunity for today’s investing conditions. They just aren’t the problematic real estate investment they are often made out to be. If you are a professional real estate investor, take a serious look at this oft-ignored avenue of investing.
Michael Kimble is a successful real estate investor, specializing in marketing. Wholesale Real Estate, is his site, where he gives away 7 free marketing systems for other investors.
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