If you are looking to get started investing in apartment complexes, you are in good company. Many investors before you have built great wealth by investing in multifamily properties – and you can too.
Here are a few tips to help you get started:
#1 Start With Your Investment Goals First.
“Begin with the end in mind.” Many investors make the mistake of going out and looking at properties, and buying “just to buy”. I can understand their excitement about getting started investing in apartment buildings, but the best way to start is to identify your financial goals first.
What do you want your financial picture to look like in 1, 3, 5, and 10 years? What kind of net worth do you want to have? How much cash flow? Which is more important to you – cash flow today or large gains 5 years from now from turning around a property?
The most important thing here is to be realistic. While it is true you can make big gains investing in apartment buildings, be sure that you are being realistic in your goals.
#2 Determine Your Property Criteria.
This is somewhat tied to, yet driven by #1. Begin by answering some basic questions.
Will you be an Active Investor or a Passive Investor? Do you want to manage the property, or have it professionally managed?
Are you looking to form or possibly join an investment partnership to purchase a larger property? Or perhaps you would rather purchase a smaller property, such as a duplex or 4-plex in your own area. Again, there is no right or wrong answer, as long as you are true to yourself and how much time you have to be involved with the investment.
#3 Get Some Basic Education.
Whether you are going to join an investment group and let someone else “hold the reigns” or do thing on your own, start with some basic education.
Invest in yourself first.
There are plenty of good courses and books on investing in apartments and commercial real estate. The worst thing you can do is buy some and never remove the shrink wrap. Take the time and effort needed to study, but know that the learning never stops. You will learn from each and every deal you close.
#4 Take Action.
“Go forth in spite of your fears.” Look we are all a little bit nervous starting out in any new venture. In fact, it can be very exciting – but do not let that stop you.
Take the time to go through #1-3 above, but also take action.
Don’t get bogged down in studying or over-analyzing. Once you have studied a little bit and are working with either an investment partner or broker, you will start to pick up on things. So take action after some time, and get your feet wet on a smaller project or a smaller investment with a group.
#5 Keep Going.
Once you get started, keep going. No one ever got rich off a single duplex or one investment partnership. It is the combined efforts of moving forward on a number of projects that will build your wealth over time.
These are just the basic steps in getting going. By no means can I cover everything you need here. However, if you get started in this order, you will be headed in the right direction. Start out with your financial goals first. Have fun with it and keep moving forward.