Buying Apartment Complex

Heinzftw · 03-20-2009, 04:34 AM

So, I have a friend who's parent's are buying an apartment complex in Oregon. I was wondering what it takes to purchase a property of 400+ units. Can you lock in the 30 year fixed rate of 4.75% or higher on such properties? I have been thinking of putting my parents in something worth investing. Having lost $200,000 in stocks and $40,000 out of my college fund is depressing as hell. I'd like to get into REAL investments and not stockmarket bullshit right now. Thanks!!!

its ray den · 03-20-2009, 08:18 AM

buying an entire complex might be in a different category of mortgage than if you were to buy a home. for example, when my church remortgaged the property, we did so at a much higher rate, i think it was close to 7%, compared to normal rates for homes at the time, which were around 5%.

KiokenM3 · 03-20-2009, 08:23 AM

Quote:

Originally Posted by yomama69

Is this for real? WTF is with these fucking kids?

WTF is your problem? hes asking a legitimate question. never heard of young people investing??? he stated a problem and now would like some help regarding an investment property

MCS · 03-20-2009, 08:27 AM

to the OP - REdidential loan rates do not apply to your friend's parent's purchase (say that quickly 3 times)

They will need to qualify and obtain a commericl loan, which as another poster indicated - is much higher than the 4.75-6% that residential loans rates are currenlty at. Commercial loans usually have more stringent downpayment requirements as well (they are riskier to the banks than an owner-occupied residential loan)

yomama69 · 03-20-2009, 08:52 AM

Quote:

Originally Posted by KiokenM3

WTF is your problem? hes asking a legitimate question. never heard of young people investing??? he stated a problem and now would like some help regarding an investment property

Have you ever heard of a teenager buying an apartment complex? I'm sure the kid's parents don't look to him for investment advice.

MrRoboto · 03-20-2009, 09:22 AM

Why not invest in a solid REIT. Get the benefit of real-estate without the hassle of being a landlord.

blue-coupe · 03-20-2009, 09:49 AM

I think generally, banks would want someone to have at least 20% equity in a project like this. Oddly, they might get by with less if they were building an apartment complex.

BForbes · 03-20-2009, 10:07 AM

My father did this in the Bahamas. He was in his late 20's. Owning a little complex on a popular island 21miles by 7 is never a bad thing. Rules are very different over there though.

mpimping · 03-20-2009, 10:08 AM

i think commercial loans are usually higher in rate but not by much depending of course. I would not invest in commercial re unless I knew a lot about it or was very sure that I would turn a profit and always look at what could go wrong like vacancies

MisterSkiMask · 03-20-2009, 10:14 AM

The rates are higher (I don't know exactly what they would be, but if you are really interested it would be easy to find out), it is more of a secured business loan. You will need a fairly substantial down payment and depending on how the loan is structured the bank may want additional collateral. They will also want piles of paperwork showing that this will be profitable and they will get their money back.

I am no pro, and this is not really the place to be asking for advice like this, but from what I hear these types of business loans are a bit hard to come by these days.

MrRoboto · 03-20-2009, 12:03 PM

In my neck of the woods anything greater then 4 units requires a commercial 'loan' which mean substantial deposit. An apartment complex is not a bad idea given the amount of foreclosed houses. What you should do is see if you can buy up a number of foreclosed houses for $.10 on the $1 and rent them for the next 3-5 years. Sell them after that and make a tidy return.

Seminole · 03-20-2009, 02:41 PM

Eh, after living in student complexes for the last 3 years I would never want to own one.

You should see the shit kids do to the apartments. In fact, right now as I type this, there is a massive pool party down at the pool. About 90% of them are people that don't even live in the complex. They have kegs, a DJ with a way to loud sound system (I'm trying to study for an exam so its annoying the shit out of me), the whole 9 yards. The place looks like a hurricane went through it. There are red cups, beer bottles, and trash everywhere. Best part is the guy who picks up trash just quit so its not getting cleaned up for a while.

I'm also really good friends with the maintenance guys and you should hear some of the stories they tell me. With one 4 bedroom the guys got drunk one night and lost their keys. So they proceeded to knock all the doors in their apartment off the hinges. The other night the fire alarm was going off and some kid was getting sick of the noise so he took a bat and knocked the alarm off the wall. You get the point.

The really sad thing is that the place is live is one of the nicest complexes in town and the kids just treat it like shit. It might be a good investment if you rule the place with an iron fist, but I would never want to deal with the headaches of owning one. But that is just a student complex, I think a more upscale older age community with young professionals would be a great place to own.

Heinzftw · 03-21-2009, 08:49 PM

Quote:

Originally Posted by yomama69

Have you ever heard of a teenager buying an apartment complex? I'm sure the kid's parents don't look to him for investment advice.

Excuse me, but only being 18 years old. Is NOT a bad thing, I started my 401k and my IRA 3 years ago. I am well on track. I told my parents to pull my money out of stocks for my college fund, but they did NOT listen. I am now down 40k and my parents 200k. I will dictate my own money in my funds. I am sick of foolishness and asshats who think I am 12 years old. I may be 18, but have achieved more in life already than you ever will.
Are you an Eagle Scout?
Been to Toastmasters?
Had a job when you were 12?
Do us all a favor and keep smart ass comments out.

Thanks to everyone for the responses. I am now looking at a duplex to purchase and rent out. Happy investing!!

nnnnnnnnnnnnnnnnnnnnnn · 03-21-2009, 08:58 PM

hahahahahhaha. This thread is funny. I think this is the first time someone has used their Eagle Scout title as a justification for credibility.

BigDog · 03-21-2009, 10:35 PM

Quote:

Originally Posted by Heinzftw

Excuse me, but only being 18 years old. Is NOT a bad thing, I started my 401k and my IRA 3 years ago. I am well on track. I told my parents to pull my money out of stocks for my college fund, but they did NOT listen. I am now down 40k and my parents 200k. I will dictate my own money in my funds. I am sick of foolishness and asshats who think I am 12 years old. I may be 18, but have achieved more in life already than you ever will.
Are you an Eagle Scout?
Been to Toastmasters?
Had a job when you were 12?
Do us all a favor and keep smart ass comments out.

Thanks to everyone for the responses. I am now looking at a duplex to purchase and rent out. Happy investing!!

hey kid, in the real world... nobody gives a fuck that you're a fucking boy scout or went to a toastmaster's meeting.... if those are your achievements... you don't have much to boast about...

go tie a fucking knot in the woods or something...

nnnnnnnnnnnnnnnnnnnnnn · 03-21-2009, 10:46 PM

Quote:

Originally Posted by BigDog

hey kid, in the real world... nobody gives a fuck that you're a fucking boy scout or went to a toastmaster's meeting.... if those are your achievements... you don't have much to boast about...

go tie a fucking knot in the woods or something...

HAHAHAHAHAHAHA

JB335 · 03-21-2009, 11:09 PM

Quote:

Originally Posted by BigDog

hey kid, in the real world... nobody gives a fuck that you're a fucking boy scout or went to a toastmaster's meeting.... if those are your achievements... you don't have much to boast about...

go tie a fucking knot in the woods or something...

perfection

jlstyle · 03-22-2009, 12:42 AM

Funny thread.

Matt60158 · 03-22-2009, 01:58 AM

If you got the stomach for it check out triple leveraged ETFs like FAZ(Bear) and FAS(Bull). If you get on the right side of the train you can pull over a 100% return in a week. However, if your wrong you can loose it all as well...

Heinzftw · 03-22-2009, 04:58 AM

Hate on me or not. I am a communications major, and definitely have a good life ahead of me. Thanks to all for the advice

yomama69 · 03-22-2009, 11:58 AM

Quote:

Originally Posted by Heinzftw

Excuse me, but only being 18 years old. Is NOT a bad thing, I started my 401k and my IRA 3 years ago. I am well on track. I told my parents to pull my money out of stocks for my college fund, but they did NOT listen. I am now down 40k and my parents 200k. I will dictate my own money in my funds. I am sick of foolishness and asshats who think I am 12 years old. I may be 18, but have achieved more in life already than you ever will.
Are you an Eagle Scout?
Been to Toastmasters?
Had a job when you were 12?
Do us all a favor and keep smart ass comments out.

Thanks to everyone for the responses. I am now looking at a duplex to purchase and rent out. Happy investing!!

No. Eagle Scouts have a homosexual association that I'm glad I don't have. Yes, I've been to toastmasters, numerous times when I was in college. No, I didn't work at 12. Child Labor Law indicate that to be illegal. You've achieved more than I ever will? I've over a decade older than you have have a doctorate degree. Are you Doogie Howser? Really?

LMAO at this kid. Of course your parents didn't listen to you. Parents don't take financial advice from teenagers.

yomama69 · 03-22-2009, 12:03 PM

Quote:

Originally Posted by Heinzftw

Hate on me or not. I am a communications major, and definitely have a good life ahead of me. Thanks to all for the advice

What's with this sense of self-entitlement? Communications isn't exactly a highly regarded major and most of the Comm Grads don't make shit in the real world. Enjoy.

03-20-2009, 08:18 AM	#2
its ray den Second Lieutenant 4 Rep 205 Posts Drives: 2004 Mazda6s Join Date: Aug 2007 Location: NY iTrader: (0)	buying an entire complex might be in a different category of mortgage than if you were to buy a home. for example, when my church remortgaged the property, we did so at a much higher rate, i think it was close to 7%, compared to normal rates for homes at the time, which were around 5%.
	Appreciate 0 Quote

03-20-2009, 08:27 AM	#4
MCS e90 newbie 35 Rep 448 Posts Drives: 2012 M3 E93 Join Date: Jul 2005 Location: Northern NJ iTrader: (2) Garage List 2006 330i [0.00]	to the OP - REdidential loan rates do not apply to your friend's parent's purchase (say that quickly 3 times) They will need to qualify and obtain a commericl loan, which as another poster indicated - is much higher than the 4.75-6% that residential loans rates are currenlty at. Commercial loans usually have more stringent downpayment requirements as well (they are riskier to the banks than an owner-occupied residential loan) __________________ E93 IL Blue M3 ZPP, ZCW
	Appreciate 0 Quote

03-20-2009, 09:22 AM	#6
MrRoboto Brigadier General 1846 Rep 4,836 Posts Drives: VO 1M Join Date: Aug 2007 Location: Canada iTrader: (0)	Why not invest in a solid REIT. Get the benefit of real-estate without the hassle of being a landlord.
	Appreciate 0 Quote

03-20-2009, 09:49 AM	#7
blue-coupe Second Lieutenant 115 Rep 253 Posts Drives: 1999 Z3 Coupe Join Date: May 2008 Location: Dallas TX iTrader: (0)	I think generally, banks would want someone to have at least 20% equity in a project like this. Oddly, they might get by with less if they were building an apartment complex.
	Appreciate 0 Quote

03-20-2009, 10:07 AM	#8
BForbes Moderator 557 Rep 4,240 Posts Drives: BSM 135i/AW E90 M3 Join Date: Feb 2007 Location: Orlando, FL iTrader: (0)	My father did this in the Bahamas. He was in his late 20's. Owning a little complex on a popular island 21miles by 7 is never a bad thing. Rules are very different over there though. __________________ - 04 Honda S2000(gone)
	Appreciate 0 Quote

03-20-2009, 10:08 AM	#9
mpimping Banned 820 Rep 336 Posts Drives: gti Join Date: Sep 2006 Location: ny,ny iTrader: (0)	i think commercial loans are usually higher in rate but not by much depending of course. I would not invest in commercial re unless I knew a lot about it or was very sure that I would turn a profit and always look at what could go wrong like vacancies
	Appreciate 0 Quote

03-20-2009, 10:14 AM	#10
MisterSkiMask Banned 147 Rep 2,014 Posts Drives: I Can not say Join Date: Nov 2005 Location: you must not know iTrader: (0)	The rates are higher (I don't know exactly what they would be, but if you are really interested it would be easy to find out), it is more of a secured business loan. You will need a fairly substantial down payment and depending on how the loan is structured the bank may want additional collateral. They will also want piles of paperwork showing that this will be profitable and they will get their money back. I am no pro, and this is not really the place to be asking for advice like this, but from what I hear these types of business loans are a bit hard to come by these days.
	Appreciate 0 Quote

03-20-2009, 12:03 PM	#11
MrRoboto Brigadier General 1846 Rep 4,836 Posts Drives: VO 1M Join Date: Aug 2007 Location: Canada iTrader: (0)	In my neck of the woods anything greater then 4 units requires a commercial 'loan' which mean substantial deposit. An apartment complex is not a bad idea given the amount of foreclosed houses. What you should do is see if you can buy up a number of foreclosed houses for $.10 on the $1 and rent them for the next 3-5 years. Sell them after that and make a tidy return.
	Appreciate 0 Quote

03-20-2009, 02:41 PM	#12
Seminole Colonel 448 Rep 2,032 Posts Drives: Red Flyer Join Date: Aug 2008 Location: 38.8977° N, 77.0366° W iTrader: (2) Garage List 2008 E90 328i [7.00]	Eh, after living in student complexes for the last 3 years I would never want to own one. You should see the shit kids do to the apartments. In fact, right now as I type this, there is a massive pool party down at the pool. About 90% of them are people that don't even live in the complex. They have kegs, a DJ with a way to loud sound system (I'm trying to study for an exam so its annoying the shit out of me), the whole 9 yards. The place looks like a hurricane went through it. There are red cups, beer bottles, and trash everywhere. Best part is the guy who picks up trash just quit so its not getting cleaned up for a while. I'm also really good friends with the maintenance guys and you should hear some of the stories they tell me. With one 4 bedroom the guys got drunk one night and lost their keys. So they proceeded to knock all the doors in their apartment off the hinges. The other night the fire alarm was going off and some kid was getting sick of the noise so he took a bat and knocked the alarm off the wall. You get the point. The really sad thing is that the place is live is one of the nicest complexes in town and the kids just treat it like shit. It might be a good investment if you rule the place with an iron fist, but I would never want to deal with the headaches of owning one. But that is just a student complex, I think a more upscale older age community with young professionals would be a great place to own. __________________
	Appreciate 0 Quote

03-21-2009, 08:58 PM	#14
nnnnnnnnnnnnnnnnnnnnnn Lieutenant 108 Rep 465 Posts Drives: 1 Join Date: Jan 2008 Location: 2 iTrader: (0)	hahahahahhaha. This thread is funny. I think this is the first time someone has used their Eagle Scout title as a justification for credibility.
	Appreciate 0 Quote

03-22-2009, 12:42 AM	#18
jlstyle Lieutenant Colonel 355 Rep 1,762 Posts Drives: Porsche Panamera Join Date: Jun 2008 Location: USA iTrader: (0) Garage List 2014 Audi S7 [0.00] 2015 BMW X5 [0.00]	Funny thread.
	Appreciate 0 Quote

03-22-2009, 01:58 AM	#19
Matt60158 ///M 13 Rep 138 Posts Drives: Join Date: Jul 2007 iTrader: (0)	If you got the stomach for it check out triple leveraged ETFs like FAZ(Bear) and FAS(Bull). If you get on the right side of the train you can pull over a 100% return in a week. However, if your wrong you can loose it all as well... __________________ "She blows more than my mind" - RHCP *Aerodynamics are for people who can't build engines.
	Appreciate 0 Quote