What Was It Like Buying My First Apartment Building

According to most of the real estate books I read, the ideal investment property is a newer house or apartment building in need of some cosmetic repairs (new landscaping, paint, carpeting, or general cleaning up). Conversely, it should not require major structural work (new foundation, boiler, or roof). The rents should be low, even though the property is situated in a good or an up-and-coming neighborhood. Lastly, the owner should be eager to unload the property. When the seller is motivated, he or she will be open to negotiating the price and other terms of the sale, such as the amount of the down payment, the closing date, and, if the seller is financing the deal, the interest rate.

In the decades since I walked into my first showing, I’ve probably considered over one thousand properties. Very few qualified as “ideal,” but I did not realize at the time that by following the popular wisdom, I was setting an almost impossible goal for myself.

I decided to purchase a small apartment building – in the range of four to ten apartments – which would provide a better chance for a positive cash flow than, let’s say, a duplex..

As my search began, two opposing emotions dominated my brain: fear and desire. As to fear, I didn’t know what I was doing. I had no idea how to find investment property. I didn’t feel street smart. All of my employment history had been with the government or in the not-for-profit sector, and I had never ventured into the for-profit arena. I felt like a lamb who had to deal with wolves.

My most recent job as an assistant hospital administrator in Pittsburgh had ended with my essentially being fired. The prospect of losing another job and starving to death concerned me.

In general, I was a fearful person.

While I had read several books on the subject of real estate investment, my knowledge was basically theoretical. Now I had to face the real world. I had to force myself to evaluate buildings, tenants, and even real estate agents who cared more about earning a commission than about finding me the best deal.

Virtually all the books I had read advocated using a good real estate agent who could find me fantastic deals and would therefore be worth his/her weight in gold. I did not know even one real estate agent, so I struck out on my own. I really got an education.

Every Sunday I scanned the Chicago Tribune Real Estate section. Almost daily the real estate ads in the newspaper or the MLS read in boldface type: BELOW-MARKET SELLER FINANCING AVAILABLE! Even so, very little incentive existed to push people toward real estate investment. Investors were content to put their cash into money market funds, which were paying over 18%.

All this added to my general anxiety about my new venture. Counteracting the fear, however, was desire. After my lousy experience in hospital administration, my mantra became, “I will never depend upon a job for my financial security.” Never again did I want to subject myself to the insecurity of a job. Never again would I allow myself to be in that position. I wanted to control my own destiny.

I had grown up poor and didn’t want to live that way.

My desire proved to be stronger than my fear, and so the journey began and the search was on.

I was on my may to becoming a Apartment Investor Mini-Mogul.

There is more to this story…..

View the original article here

Some people always seem to get lucky in finding and getting perfect apartment deals. Don’t you wish you were like them? Don’t they drive you crazy at times? How do you become like them or make yourself luckier? What are you missing? What can you do that’s different? You’re ready for it, right?

Wouldn’t you love to get lucky and not only find your first deal, but actually close on it? Well, read on my friend…

I got this email the other day from a leadership trainer and in it was something I believe is profound, yet so simple. His email spoke on five ways to make you luckier. As I read though the email, I pondered on these 5 things and I looked at my life successes and agreed 100% of what he says. Here’s what he says and I break it down for you further as it applies to us real estate investors.

-5 Ways to Make Yourself Luckier-

Flow – Be in the moment. Be spontaneous. And stay there! You ever get into the flow of something and everything is going super well, then just like that, you talk yourself out of the flow? This is letting your “head trash” rule your life’s flow. So, next time you’re in the flow, pay attention to the negative words that enter your thoughts. Thoughts rule. Say no to stinking thinking! In other words, when a smoking deal comes into your life, don’t push it away with unbelief and doubt. Follow up no matter what and flow with the deal and let it takes its course – this could be “the one”!

Come from Love – There are only two ways to go through life: coming from fear, or coming from love. Coming from love means you are coming from “more than enough” – and that’s a vibration that people can feel. Therefore, approach your deals and sellers with love and understanding and watch the magic happen. People don’t care what you know until you show that you care. If you take on this attitude, I guarantee deals and opportunities will show up! Guaranteed!

Come from Service – Most people are stuck in WIIFM: “What’s In It for Me?” truly successful people are service-minded people who are tuned to WCIDFU: “What Can I Do for You?” This is the key to achieving phenomenal success in real estate. Come with this mindset when you’re trying to get the seller’s motivation or during negotiations and you’ll increase your chances of a successful outcome by 10 times.

Trust – Realize that you don’t have to know everything before you start. Just do it.

Action – Just do SOMETHING. Taking no action is the greatest danger of them all. Remember, inaction is a form of action, and has its own consequences. If you don’t take action, events will control you, you will be constantly reacting instead of acting. Life rewards action is the bottom line.

These are 5 traits of truly wealthy people. And the wealth I’m referring to has everything to do with money, relationships, family, and health. So, if you want to put yourself into position to “get lucky” and experience life to the full (the way it was meant to be!), take a good look at these 5 traits and ask yourself if that’s what you’re being. It’s just a matter of time before your perfect deal shows up because of it. If not, then it’s not too late. Be intentional in making the changes necessary to Be.

Til next time…

View the original article here

“Every great leap forward in your life comes after you have made a clear decision of some kind.” – Brian Tracy

Apartment property investors are constantly asking me when is the ideal time to get their properties ready to go “on the market.” Before I answer, I wanted to share the biggest mistake in selling an apartment building. The #1 biggest mistake I see investors make is:

Selling when you NEED to sell.

I have seen many investors over the years literally leave tens of thousands of dollars on the table when they sold their property because of some change in their lives. Retirement, divorce, financial problems outside of their property investment, and any other life change that “forces” the need to sell. This is the biggest mistake I see investors make, and one that you should avoid.

Now on to when you should get your property ready to sell. In my opinion, I would start getting things ready at least one year ahead of time. I know, timing is everything and you may not have this much time due to circumstances being what they are, but ideally it should be about a year.

Why a year? The MAIN reason is to get the rent up as high as possible. You know the tenant that you have been really nice to over the years. Letting them get by with lower (sometimes a lot lower) than market rent? Well now is the time to get the rent up there.

Why? Remember, the main points of value will more than likely be the cash flow the property produces. So, the rents are key here.

Also, this will give you time to do the necessary work and capital improvements that the buyer would possibly discount once the property is on the market. I have known buyers that have literally changed the value of their buildings by tens sometimes hundreds of thousands of dollars by doing these things.

If you can get started working diligently on these at least a year in advance, and maintain focus, you will increase your sales price substantially over selling at a time when you NEED to sell. Timing can be everything, as they say, but getting the property performance up there as much as possible is key to a successful sale.

View the original article here