If you like Cliff Notes, here’s a quick summary of some of the advantages:
Rental Demand is Up – Apartments are always strong because everyone needs a place to live. As a result of the Great Recession, less people can qualify to own a home. This, combined with demographic shifts of the young generation who rent, has led to record demand for rental apartments. You benefit from this demand whether wholesaling, buying to hold, or rehabbing.
Lots of Small Apartments for Deal Flow – You are in the marketing business, marketing for deals and dollars. There are lots of small apartments from which to prospect for deal flow.
Little Competition – Few people enter multifamily due to three limiting beliefs: 1) the belief they need to graduate from single family to multifamily, 2) the belief they need big bucks and credit to do these bigger deals, and 3) the belief they need to deal with tenants and toilets. All are false.
Hedge Funds Don’t Pursue Small and Mid-Size Apartments – Hedge funds must move large sums of cash, millions of dollars, hence they traditionally focus on large apartments, and they recently shifted to also buying up large house portfolios from banks. In single family, this has eroded both deal flow and profits for the single family entrepreneur. The small and mid-size apartment market is untouched by hedge funds and wide-open to you, the apartment entrepreneur.
Can Quick-Flip Apartments Just Like Houses – You can wholesale small apartments just like houses. Small apartments close fast, enabling you to quickly close that critical first deal.
Lots of Buyers for Small Apartment Flips – When it comes to wholesaling, there are lots of buyers for your small apartments and they are easily distinguishable and accessible. The largest buying group of small apartment is burned-out single family landlords who want to get out of the property management business.
Big Wholesale Fees – With bigger ticket items comes larger profits. Expect five-figure checks (or higher) when you are flipping your small apartment contracts.
Little Cash to Raise When You Buy – As compared to mid-size and large apartments, the purchase price of small apartments is low. They require a smaller amount of cash to buy (if any). The best private investing source for small apartments is holders of self-directed IRA’s. Find just one self-directed IRA holder with $50,000 to a few hundred thousand dollars and you have your bank.
Combine Small Apartments with Your House Business – If you are making money with houses now, you can and should add small apartments as another profit center. Many of the same people who buy your wholesale houses will buy small apartments. Leverage your buyer’s list.
No Prior Experience Needed – You are qualified right now to start with small apartments. You do not need to graduate from single family to multifamily. You can start with multifamily just as I did as well as all the students cited in the Case Studies in the book.
