The six most important steps you have to take before buying your next Apartment Building. These simple and easy to follow steps will allow you to get the property of your dreams a lot quicker than you think it actually takes.
1. Financing: Depending on your financial situation you will either have to get pre-approved for a loan or have proof that you can pay in cash.
2. Multi-Family Broker: Now this step is very important because you want someone who focuses in this specific form of real estate. Although all realtors can sell property that does not mean that they know the ins and outs of multi-family real estate. This is an entire different animal which is why it is important that you have someone with experience. Also do not just pick someone off of a postcard or park bench. Find someone that is going to work all day for you because they have your best interests in mind.
3. What are you looking for? : This means size, location, condition. etc.
4. Math: What are the numbers for the property? Prior financials from the previous owner or company. Repairs that need to be done immediately. Vacancies and how much a property management company would cost. This is how you can measure your return on investment.
5. I WILL NOT OVERPAY: This is the most important step when you have reached the part of making an offer for the property that you want. Incorporate the math aspect with your negotiations because sellers usually want to make more than the property is actually worth.
6. Due Diligence: Have a property inspector take a look at the property before you actually close because you do not want to have any surprises. Knowing everything you can about the property will help you predict what needs to be done in the future.