What does it take to build and run a new apartment complex?
I've all but decided that apartment complex ownership is the business I want to start with as an entrepreneur. I'm currently working toward finishing my associate of arts degree, taking business/economics/accounting classes to assist me with the technical aspects of starting the business. I plan to graduate in spring of next year. After graduation, I'm going to allow myself some time to save up money for a down payment on a loan. Along with these plans, I have quite a few ideas about how I want to run my business (between floor-plans, amenities etc.) but to be quite honest I'm not sure where to go from there. I may ask more questions later if I need more detail on a particular aspect.
So my questions are these;
What major expenses may I be forgetting or overlooking in the planning process?
What advice do you have for first-time landlords?
What are some tips or red flags on choosing builders, contractors and inspectors?
What advice do you have for choosing a location?
What is some advice on saving money on property?
What are some ways I could save money on initial investment?
What things should I not cheap out on for initial investment?
What financial qualifications are needed for such an big loan?
How long should I wait before hiring people to run the business for me?
#architecture #real-estate #real-estate-investing #apartments #apartment #landlord #property-insurance #property-management #career-details
The best education in the multi-family real estate profession is to get out there and spend a few years working for a real estate company that develops and manages multi-family real estate. You will learn practically how its done. No amount of textbook education can provide that required experience.
Even if you decided to go it alone, you will likely need some investment from others to assist you in the endeavor. Typically, investors will not jump on the wagon and work with you unless you have the experience to pull off the investment because your inexperience becomes a huge risk to their investment.
I looked at a lot of different questions on this website to answer and thought I could add the most value to you in answering this one given my experience in owning/ running apartment complexes myself. This is the best business in the world to get into in my opinion.
My favorite resource to learn about investing in Real Estate is a podcast called, Bigger Pockets. I encourage you to check this out as it's where I learned a lot of the things I have implemented and know how to do now. My favorite real estate book that I HIGHLY encourage you to read is called "Rich Dad, Poor Dad" by Robert Kiyosaki. This book changed the game for me!
- Alex Pascale
One does not ordinarily, out of the blue decide to own an apartment complex.
This is not a small business to operate and generally runs a negative cash flow for four quite a while.
The national guru whose has expertise in this area with be David Lyndal.
If you are unwilling to invest $10-$20,000 in education before entering this arena, it is probably not an arena you should be playing in.
Jared ChungCareerVillage.org Team
Jared’s Answer, CareerVillage.org Team
There are some really great answers and advice above. I personally own a few apartment buildings and I’m very glad I made the investment and learned the right things to do. It may be easier to start by owning a small apartment building before a big complex. However, make sure you learn all about fair housing laws in your area and how to financially plan for being a landlord. Many areas have classes offered by landlord associations or government agencies. I attended these classes and a looked at the lease forms from the local landlord group and the local realtors’ association. These leases gave me a general idea of things to know before attending landlording classes. I always advise new landlords that they need of a team of locally licensed professionals which at a minimum contains a realtor, property attorney, financial planner, banker, and contractor/ inspector. There are Real Estate Investing groups in many areas. I attend these but I am always careful if they are trying to sell me something very expensive or want my investment without having seen the property. Please watch out the most for anyone that is a hard-core sales person. There are many steps to break down in these as founder Jared Chung said above, each one of these are a lot of questions.
I hope this helps as a starting point.
Jeff recommends the following next steps: