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ARTICLE -
Buying Apartments by
Robert Poe Apartments have
appealed to many investors over the years, but
they are not the simplistic cash flowing
investment that many new investors have
envisioned. The apartment investment can be a
very rewarding or a very trying one, depending
on your approach.
Apartment
investing can go by several names: multifamily,
plexes, multiplex to name a few of the most
common. There are different classes of
apartments within the industry ranging from A to
D. The class is determined by a variety of
factors including rents, location, condition and
age of the property and several other factors
that vary by facility. All can be worthwhile
investments IF you approach the purchase of such
facilities like any other business or investment
decision.
The first two
factors you must consider is your amount of
equity or cash you have for the deal and your
borrowing ability. Commercial real estate
financing is much more stringent than buying a
house or a car, and with the economy and the
banks reluctance to lend it has gotten even
difficult but not impossible. It is useful to
know that 4 units and under can be financed by a
regular mortgage loan designed for Single Family
Houses. Please consult with one of our loan
specialists for more details if you are
interested.
You should have a
good understanding of landlord/tenant law before
you embark on multi family ownership. You can
take classes on this at your local rental
housing association or community college. Rental
property has a lot of liability exposure but
that can be mitigated to some degree by
knowledge of the law. In addition, finding a
good broker who knows the apartment market and
can guide you to a facility you are comfortable
with and you can turn into a successful long
term investment is a must. If you decide you do
not want to take on the rigors of property
management, hiring a good property manager can
be a good business decision. Again, your
commercial real estate broker can be a valuable
resource to guide you along on this path.
A good broker can
help you with the due diligence on your intended
purchase and make sure that you are ready to go
forward when the escrow closes and you take over
your new facility. If you are interested in
buying multi family, please call our office at
503-351-5025.
- Submitted by
Robert Poe, CCIM, Certified Short Sale
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