Buying a 4-20 Unit Apartment Building
When you are going to buy a 4-20 unit apartment building you could search online, go to a broker, or look at the ads in your newspaper. These are all serious and good methods to be looking for a 4-20 unit apartment building. But is it enough? You are looking at the same ads as everyone else and this will make it harder to beat the competition and getting great deals. Wouldn't it be great to get a deal on a building that is not on the market yet?
An easy way to try that sometimes work is to place an advertisement yourself that states you are looking to buy a 4-20 unit apartment building. Sometimes this can lead to an owner calling you to discuss what is possible.
If you are looking into buying apartment buildings that are not for sale you should take it one step at a time:
- The first thing to do is to decide what your are looking for exactly, in this case 4-20 unit apartment buildings.
- The next step to take is to look for apartments that fit this criteria.
- Last step on the line is to get in touch with the owners.
When looking into buying a 4-20 unit apartment building that is not for sale you have to have an expanded view. Don't just look at buildings that need to be fixed up or have problems because the owner will sell easier. You can take a shot at any building you are interested in, all you have to do is ask. What's the worst that can happen? That the owner says it is not for sale.
Of course, you have to be tactful and not just come barging in with the question. Explain who you are, that you are an investor. Tell him why you are interested in the building and make him an offer within a week if he is interested in selling. If he's not interested, be polite and thank him for his time. One thing you should do, even when he is not interested, is send him a letter or a card, you never know when he changes his mind he can still call you.
If you get an interested owner, you will have to explain that you are not a broker and that your offer is going to be based upon the return your investment will bring to you. To make a precise offer you will need to get a look at the books, especially the rent roll and the occupancy rate. Some other figures that you will need are the operating expenses for the last year and the total annual income.
Lots of owners will not be willing to hand their books over to you, just like that. So tell them you will sign a confidentiality agreement before you look at them. If the owner doesn't want the tenants to know he's considering selling the building you will not be able to inspect the units before making an offer. You can put a statement in the offer that you will still need to inspect the units.
If you can buy a 4-20 unit apartment building before it is placed on the real estate market you will see that it's beneficial. You won't have any hard competition to deal with and there will be no sales commission and this leads to a better price. Just look, find and make an offer.