Multi Family Buildings For Sale: 7 Ways To Find Great Deals

If you are investing in this market, you are probably scratching your head looking for multi family buildings for sale. There are plenty of deals but lots of misinformation. The internet has created a frenzy of promotional offers and get rich quick ideas and those looking to earn a quick buck are fast to solicit properties which they have no control over.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

In this article, I am going to help you find REAL deals so that you can save time and work efficiently in your business.

7 Ways To Find Great Deals on Multi Family Buildings For Sale


1.  CCIM.com – This is the most under-utilized and valuable service that I am aware of.  It is free and it contains real nuggets of gold.  Of course, you can go to http://www.ccim.com and find all kinds of resources about investing in commercial real estate, but the gold is found at http://findaprofessional.ccim.com/search.  At that little-known link, you now have access to some of the best, most experienced commercial brokers in the market you are interested in and the property type you are looking for.  Treat this information with respect because if you can nourish the relationships that you have the ability to develop, this may be the only resource you need to find great deals on multi family buildings for sale.

2.  Evictions Court – If you own any rental property and have been through an eviction, you have seen a concentrated group of frustrated landlords.  They are not ALWAYS looking to sell, but a good chunk of them are.  Just go down to your county courthouse and find the days and times of evictions courts.  Get in the habit of going to all of them.  Just watch your first couple times and see the frustration.  Introduce yourself and let them know you are interested in buying multi family buildings.

3.  Canvassing – This is usually the best way to start finding buildings in your area.  Canvassing is driving up and down the streets and neighborhoods where the multi family buildings in your area exist.  You are not necessarily looking for buildings for sale.  The main point is to get to know your market, know the buildings, and actually find the owner out at the property.  You can uncover some golden nuggets if you are dressed well but not overkill, have a good conversation, and are good with followup.  This is also a great way to build your database.

4.  LoopNet – Everyone goes to loopnet first to find deals.  This is a great place to get started because you can learn how to analyze deals.  Once you are past that stage, the main reason I would use loopnet is to source multi family brokers.  If you look for multi family for sale in your market, pull out all of the listings and call all of them.  Don’t do it just to get a deal, do it to build relationships.  Keep in mind that commercial brokers on loopnet are probably getting a lot of tire-kicker buyers.  If you are qualified, then show them that.

5.  Direct Mail – Sending letters to building owners is probably the fastest way to weed through all of the potential riff-raff and get straight to a good deal.  This really depends on your budget.  If you have at least a few hundred bucks a month, you can go to the county courthouse, record all of the 5 unit and up multi family buildings in your market and send a series of letters to them.  You will get calls and most of them will be owners who are trying to get more than their property is worth.  Expect to get 1 good deal from every 100 owners you talk to.

6.  Ads – Of course, putting an ad in the local newspaper is one way to get leads.  The bad news is that newspaper readership is way down because of the internet.  The good news is that most investors, whether buying or selling, do look at their local paper still.  Although, it is not the best way to spend your money, it is good if you have a sizable budget.  Also, you can advertise using Adwords on Google if you know of some good keywords that owners may be typing in.

7.  Banks – Forming key relationships with asset managers in your local banks can be a great source of great deals.  If you can show that you are serious and qualified, you can work your way into getting direct access to OREO and pre-foreclosure assets.  If you are buying distressed properties or distressed commercial notes, this is a must.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

I hope this article has helped.  If you have any questions or comments, please leave a comment.

Nick

How to Calculate Cap Rate

If you are investing in apartment buildings, it is essential that you learn how to calculate cap rate.  The majority of industry professionals like brokers, appraisers, and other investors use the cap rate analysis to assess their opinion of value.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

While most investors look at cash on cash return when comparing investment alternatives, multi-family investors look at cap rate.  Cap rate is simply the cash on cash return that an income property provides as if the property was purchased all cash.  In other words, if you have $1MM to invest and you want to look at all the places you could invest that money, you would use the cap rate to tell you what your cash on cash return would be.  Cap rate is similar to the “price to earnings ratio” in the stock market.

More commonly, cap rate is used to compare values of properties in a given market.  Instead of looking at other houses in the area to assess value like in residential; in commercial, industry experts assess the financial performance of one building compared to the other buildings in the market and use their cash on cash return to find how much an investor would most likely be willing to pay.

If you don’t know how to calculate cap rate, don’t worry, I am going to show you now:

There are a couple pieces of the information puzzle you will need to find the answer to the true cap rate.

First, you will need to know how much the net operating income of the building is.

To get that, find out how much the owner is collecting in revenue.  This would include laundry income, cell tower space, billboard leases, parking leases, garage leases, and of course, rental income.

Once you know the total gross collected income for the previous 12 months, then find out the previous 12 months worth of expenses.  This would include fixed expenses like taxes, insurance, etc. and revolving expenses like gas, electric, management, water, repairs, maintenance, etc.  Some people stop there.  Most appraisers do not.  They also include projections to cover vacancies, credit loss, replacement reserves, etc.

When you have the income and expenses for the previous 12 months of operations, all you do is subtract the expenses from the income.  If you had $100,000 in income and $40,000 in expenses, you would be left with a net operating income of $60,000.

Now that you have the net operating income, you can simply divide that number by the price of the property to get your cap rate.  If you had a $60,000 NOI and the owner was asking $1,000,000 for the property, you would get a cap rate of 6% (.06).

Now that you know your cap rate, make sure that it is in line with the market.  The higher the cap rate, the more cash flow it produces.  On the contrary, the lower the cap rate, the less cash flow.

This means that the property you are looking at is too expensive if the cap rate is too low.  If the buildings in your area say your prospective purchase is worth a 6 cap, and the owner is asking a 5 cap, then you know it is over priced.  If they are asking a 7 cap, you may have found a bargain.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

__________________________________________________________________

Nick Graff, CCIM is an experienced commercial broker who specializes in finding apartment building deals in America for cash buyers around the world. If you or anyone you know would like priority access to his deals, visit http://www.apartmentbuildingbargains.com .

How to Build a Real Estate Portfolio

If you are looking to increase your wealth, learning how to build a real estate portfolio should be the backbone of your investment company.  In this article we are going to talk about the best ways to build your portfolio so that you can start the right way the first time and not lose a bunch of money.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

Here are 3 steps to follow when building a Real Estate portfolio:

1.  Secure your income

Most real estate investors who fail, fail for this reason.  They jump into Real Estate headfirst with no plan, no education, and no money.  People tend to want to get rich quick and don’t want to take any risk at the same time.  Most investors who succeed for the long-term have a good income before they start.  The reason this helps is because they have financial backing when the storms hit.  Also, they have “skin in the game” and tend to make better decisions because they have more at stake than someone only using someone else’s money.

If you do not have a solid income right now, create one.  The best thing you can do is secure your family’s financial future by starting a business with a proven business model.  Not only will you have peace of mind that your family is OK, you will also have more skills to manage your real estate portfolio more effectively, and you will have the money to use for down payments, repairs, vacancies, etc.  You can start a landscaping business, a consulting business, a Realtor business, a fix and flip business, you can do whatever you want!  Just make sure it is proven and realistic for you.

2.  Secure your assets

Before you get too deep into Real Estate, it is advisable to setup at least one LLC and one S-corp or other tax-saving entity.  When you are in Real Estate and have success, you will be a moving target for those who prey on wealthy people.  Consult with a CPA and a lawyer to get your entity structure setup before you have all of your properties tied to you.  You could lose everything you work so hard for if you do not get this step right.

3.  Build your team

Once you have the money to invest in Real Estate and you have a solid asset protection plan in place, you can start hunting for deals.  If you already have a high income or anticipate that happening, there is a good chance that you also do not have much time.  If that is the case, you will want to good at delegation.  Some investors say that this is the secret to their success.  Learn how to find good, professional, hard-working experts in each area of the Real Estate Industry.  A good real estate broker usually has most of this team in place for you.  They add value to their clients when they have a good property manager, a good lawyer, a good general contractor, a good accountant, etc.  If you already have some good relationships with any of these industry experts, contact them and ask for some introductions.

It is very important to interview several candidates for each position.  You may find one broker/lawyer/other pro telling you one thing and the other telling you something else.  This will give you the opportunity to find the right answer and hire the one you feel best about.  Getting this step right will lead to lots of deals and require less of your time.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

__________________________________________________________________

Nick Graff, CCIM is an experienced commercial broker who specializes in finding apartment building deals in America for cash buyers around the world. If you or anyone you know would like priority access to his deals, visit http://www.apartmentbuildingbargains.com .

How to Get Started in Real Estate

Real Estate is a dynamic industry with many moving parts. There are many roads you can go down and choosing the correct path, the first time, will catapult you into success much faster. In this article, I am going to cover how to get started in real estate so that you can have that much needed jump-start.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

The first question that must be answered is:  WHY am I doing this?

Obviously, we all want more money, that is understood. But on a deeper level, why do you want that money? Is it for a house, a car, your child’s education, for retirement, for time freedom, what is it? If you have that picture clear in your mind, it will be much easier to overcome the inevitable roadblocks that we all face in building a business.

The next question that should be answered is:  What are my strengths and weaknesses?

If you understand what you are good at and spend most of your time doing that business activity, you will have a better chance for success.  By determining what you are weak at, you can delegate the tasks which you find less inspiring or more difficult.  If you are not in a position to pay someone a full-time salary to do all of your menial tasks, I would recommend checking out a site called Elance.  Here you can outsource your individual tasks or find a virtual assistant to do more of a consistent flow of your work.

Lastly, you should find out what needs to be done out there:

What in your local community needs attention?  What needs to be done for your state, for your country, for the government, for the world, for your family, your friends, for other business owners, and anyone that pops up in your mind as someone who is probably facing some challenges right now?  Foreclosures are huge right now.  Renters are prolific.  Think short sales, REOs, commercial foreclosures, loan modifications, rehabbing, rent to own, seller financing, providing investors with above average and safe returns, and anything else unique that you can come up with that solves someone’s problem.  If you think about it, this is how most big, successful companies were founded: solving other people’s problems.

Once you have these foundational questions answered, you can start searching for the right real estate business model for you.  It is very important to pick just one strategy out of the gate and run with it.  If you  have too many business models that you are trying to get going at the same time, you will not become an expert at any of them.  Once you pick one, specialize in that, become an expert at it, systematize it, and then you can pick your next business model to go after.

Once you know for sure which business model you want to go with, then you can take the last and most important step:

Pick the right Real Estate Mentor

If you get this step right, and you have followed the advice above, you are all but guaranteeing your success.  The right mentor will have paved a path for you.  You do not have to create a business model, test ideas out, spend a ton of money on un-proven marketing campaigns, learn how to run marketing campaigns, network to establish relationships, and on and on.  You can offer them a free service to get in the door and then start working with them to build rapport.  Once you have a relationship established with your mentor, you can explain your long-term goals and how you are looking for a mentor.  If they see you as a hard-working and honest individual, there is a good chance that they will have a project for you to tackle.  If you are efficient, diligent, and good at taking instruction, they will let you into their world and their success will soon rub off on you.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

__________________________________________________________________

Nick Graff, CCIM is an experienced commercial broker who specializes in finding apartment building deals in America for cash buyers around the world. If you or anyone you know would like priority access to his deals, visit http://www.apartmentbuildingbargains.com .

How to be Successful in Real Estate

If you are just getting started with a new career in Real Estate, it is very important to prepare, plan, and execute.  But going beyond the basics and executing some specific plans of attack will ensure your success.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

In this article I am going to write about how to be successful in Real Estate and offer you one rule which will keep you safe on the vast majority of your deals.

Real Estate or any other business opportunity is very exciting and the prospect of financial freedom, spending time with family, charity, and time freedom make the hard work worth it.  It is important to keep these things in mind as you build your business.

For starters, remembering WHY you are doing this in the first place will shift your mindset from negative thoughts about failure and how things won’t work to thoughts of success and finding ways to make it work.  As soon as you lose sight of this, things get hard.  When the pain of building your business is easier than the pain of the bleak outlook in life or the challenges that we face daily, building becomes easier.

If your WHY is big enough, the rest will fall into place.

It is also important to keep a helicopter view of your business at all times.  If you get too caught up in emotions, it is easy to fall into the “guru trap”.  This is when you feel great, excited, and emotional about getting educated all the time.  It is necessary to have knowledge if you want to fail less, but it is not necessary to know everything to get started.

In fact, I would recommend that you pick one mentor, coach, or instructional system to get educated in the niche that you pre-determine is where your interest will be and then build a business in that until you are successful.  No more courses, bootcamps, trainings nor coaching programs unless it is required to build your skills.

Once you are successful in your niche, then you can add income streams to your existing business.  You can also leverage your time with employees, virtual assistants, and systems.

When it comes to investing in Real Estate, there is one rule that will make or break a newbie.  This factor is simple in nature, sensible, practical, and doable.  If you follow this one rule on every deal you do, you will never fail unless the analysis went wrong.  In fact, if you follow this one rule, you will make a lot of money on virtually every deal you do.  This one rule will also help you assess whether people you are dealing with in the Real Estate industry know what they are talking about and are helping you or they are preying on you.

And the one rule you must follow to be successful in Real Estate is:

Buy it right!

Yep, that’s it!

If you get good at this one thing, you will succeed on virtually every deal you do.

One of my mentors (residential fix and flipper) followed this rule and he set his profit minimum at $25,000.  He analyzed opportunities, made offers, and closed on the ones where he knew for sure he would be making at least $25,000.  If it didn’t pass that test, he would pass on the deal.  He flipped several hundred properties and never lost money on a deal.  Pretty cool, huh?  Did he always make at least $25,000 on each deal when all was said and done?  No!!!!  That is the point.

Real Estate is a dynamic commodity.  Markets are ebbing and flowing, prices are going up and down, latent defects go undisclosed, environmental issues arise, and on and on.  You don’t know what you don’t know and you have to prepare for the unknown.  If you factor in 25k for profit and you make a $10,000 mistake, oh well, you still made $15,000+.

The same applies in apartment buildings.  If you plan to cash flow $100,000 your first year, cut that in half.  Does the deal still seem sweet?  If you check, check, and re-check all of your numbers including the value of the property, the income and expenses, the condition, market conditions, and all other due diligence and you feel 100% confident and even excited, then you may have a deal.

When you buy a property for a discount from a motivated seller and you combine that with education and good mentorship, you are setting yourself up to be successful in Real Estate.

To learn more about investing in commercial Real Estate, click here to see the fastest way to wealth that I know of.

__________________________________________________________________

Nick Graff, CCIM is an experienced commercial broker who specializes in finding apartment building deals in America for cash buyers around the world. If you or anyone you know would like priority access to his deals, visit http://www.apartmentbuildingbargains.com .