I got an email the other day from someone I’m helping buy an apartment building. We’re at the stage in the process where we’ve gone from the theoretical work of modeling out different acquisition opportunities to the practical work of getting her in a position to start actually leasing out units. Reality has set in: … Continue reading “What’s a new landlord to do?”
Category: How to
Multi-Family Millions: The book that started my career
If you’re interested in making money from re-positioning apartment buildings like we do, you should read Multi-Family Millions, by Dave Lindahl (that’s not an affiliate link; I don’t get paid if you buy it). A few warnings: The book is cheaply made. It feels like someone self-published it out of vanity. I recommend getting the … Continue reading “Multi-Family Millions: The book that started my career”
How to estimate what your property taxes will be
When you buy an apartment building, your two biggest costs will be your mortgage and your property taxes. It’s easy enough to estimate your what your mortgage payments will be (try this calculator)… but how do you estimate your property taxes? In California, we’re blessed with Proposition 13, which effectively limits your property taxes to … Continue reading “How to estimate what your property taxes will be”
Why you should get pre-approved for a loan
Say you decided to sell your building and I offered to buy it. Say I offered you the following deal: I’ll buy your building for $1MM, but first I want you to guarantee you won’t sell it to anyone else for the next 45 days while I get the money together. You would be an … Continue reading “Why you should get pre-approved for a loan”
OK, I want to buy a building. What do I do first?
Call me. J/k. Sort of. The first thing you need to do is take stock of your current position. Here is what you need to get started: A decent credit score. FHA will loan down to a 580 score, but ideally you’d be north of 700. A stable work history. The ideal loan applicant would … Continue reading “OK, I want to buy a building. What do I do first?”
Recourse vs. non-recourse
There is a major, major difference between recourse and non-recourse loans, as developers all over the country have found out to their distinct displeasure over the past few years. A recourse loan is a loan where one or more of the borrowers agrees to personally pay back the loan, regardless of what happens to the … Continue reading “Recourse vs. non-recourse”
How you improve the neighborhood
Sometimes all you need to do to improve your neighborhood is to yell at a priest. My brother and I own a 16 unit building on Reno St (the one from this story) that’s across an alley from a new church, one of those Latin Pentacostal deals. The street itself isn’t the nicest one in … Continue reading “How you improve the neighborhood”
Should I hire a property management company?
Not now, maybe later. That’s it, in a nutshell. Here’s what I mean: On your first building, likely a 2-4 unit building acquired with an FHA mortgage, you don’t want or need a manager. First, you need to learn a bit about the business – what it’s like to fill vacancies, collect rents, deal with maintenance … Continue reading “Should I hire a property management company?”
How do apartment buildings increase in value? And how can you benefit?
When you put a bunch of money and time into an asset, you want it to increase in value. Obviously. So you might ask: How does an apartment building increase in value? Remember: An apartment building investment made correctly should cashflow to you every month, so you make money as you go along. But an … Continue reading “How do apartment buildings increase in value? And how can you benefit?”
Should you post a “For Rent” sign on your building?
No. Or, at least, not unless your building is on a high traffic street. Why? Because posting a sign does two terrible things: It makes your building look cheap. Useful signs are large enough for people driving by to see. Signs that large are almost always tacky and horrible. Do you want your building to … Continue reading “Should you post a “For Rent” sign on your building?”