Multifamily

Creating Cashflow With Apartment Wholesaling | Building Wealth

apartment wholesaling cashflowCreating cashflow with apartment wholesaling. If you were talking about this with another real estate entrepreneur the conversation would probably revolve around doing more deals. A series of lump sum cash assignment fees occurring more frequently.

This would definitely be the case if you were flipping single family homes. The deals are simpler to do, they don’t take as long. But it’s different with apartment buildings.

Apartment buildings are income property. So 3-6 months after you wholesale a property to a new buyer, that investor (assuming they get straight to work on their turnaround plan) will soon be earning increased amounts of net operating income.

This creates options for you as an apartment wholesaler you don’t really have when flipping houses.

Your edge as an apartment wholesaler is to put extra time, effort, and emphasis on marketing and negotiating in order to assemble a lot of sellers with seeds of motivation in their ownership of the property, that then germinate and grow into a full on crisis that requires rapid liquidation of the property at rock bottom price.

Due to this being all you do, you can afford to put all your time and effort into identifying motivated apartment owners, and following up with them. This is how you get your double discount cash prices, and inordinately favorable (to you) terms for owner financing.

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Posted by aws - April 28, 2017 at 3:11 pm

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How Do I Get Started Wholesaling My First Apartment Building?

Get Started Wholesaling My First Apartment BuildingIf you’re excited by the potential, but the big question weighing on you is, “how do I get started wholesaling my first apartment building”, don’t worry, this is well trodden territory. You have been snared by an insidious trap, but there is an answer, and a way out.

When it comes to wholesaling apartment buildings, there is more fear involved than wholesaling a house because … well, the numbers are bigger. The asking and selling prices are usually in excess of $500.,000. That’s out of the comfort zone of most beginning wholesalers.

The result is fear. Blind fear. The numbers way exceed your financial experience to this point, and your brain scrambles. It’s easier to look away and go back to where you feel in control.

Image Credit: Wikimedia

And that’s perfectly fine. In fact, it’s more than fine. It’s smart. Start where you are, build experience, and build your confidence. Keep it simple. Flipping houses is a simple process, that you at whatever level you comfort zone currently is.

Start where you are, but get started.

As Dwan Bent-Twyford notes, $10 is all you need to secure a house to flip for $10,000 or more:

Wholesaling Real Estate Step by Step

To make the contract binding, you have to leave a deposit with the homeowner at the time of signing. We typically leave a $10 deposit. This way, if we are unable to wholesale the property, we are not out a lot of money.

$10! Who would take that? Everyone! When we first started asking homeowners to take a $10 deposit, we thought we’d get kicked out of the house. To our surprise, no one gave us any grief.Get Started Wholesaling My First Apartment Building

If you say it like this: “We typically give a $10 deposit and close in 45 days. That won’t be a problem, will it?” They always say, “Okay.” The only reason a homeowner won’t take $10 is because of the way you present it. Speak with confidence.

 

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Posted by aws - April 25, 2017 at 10:16 am

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Buying An Apartment Building Beginners Guide

buying an apartment deal beginnersBuying an apartment building beginners guide. No doubt, buying a multifamily property is a great idea to begin building wealth and cashflow for years to come. But if you want to make a success of your venture, there are a few things to bear in mind.

First, unless you want to be stuck managing an apartment property yourself for not much money, or worse, that is costing you money, you must identify a property that has “upside”. Upside is a term that basically means potential for increase in value.

Apartment buildings are income property, the amount of income they produce determine their value. So when a property has vacant units, below market rents, and deferred maintenance that may be causing good tenants to not want to live there, the property has “upside”, or potential to increase the income, and therefore the value of the property.

Image Credit: Bigger Pockets

In his moving account, Michael Blank describes how saw the potential upside in his first deal:

How I Bought a 12-Unit Apartment Building with No Money Down (And How it Nearly Bankrupted Me…)

The seller was a widow who was slowly selling her deceased husband’s assets, including this building. She was motivated, but not super-motivated. My sense was that the purchase price would be at fair market value based on the financials on the building, but that this might be a value-play opportunity. I felt that if the rents could be increased from $500 per unit to $750, we could add significant value over time.

The “value play” mentioned is the presence of the elements, like below market rents, vacancies, that give you the ability to increase income when you correct them. It is important to buy properties with value plays as it gives you the ability to have a low cost basis, and strong cashflow 12-18 months after buying, putting you (and the property) in a strong financial position. Read more…

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Posted by aws - April 20, 2017 at 12:52 pm

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