I didn’t know this and it made me over $100,000 dollars in the first year.

I used to think that I needed a lot of money and a great credit score to buy large apartment deals and commercial property. When I found a property I wanted to buy and started looking at financing I learned the biggest lesson I didn’t know.

When a bank is lending money for a multifamily apartment investment, the bank is primarily concerned with the income and creditworthiness of the property, rather than the income and credit score of the borrower. This is because the bank is using the rental income from the property as collateral for the loan, rather than relying on the borrower’s personal income and credit history.

The bank will likely consider factors such as the location of the property, the condition of the units, and the potential rental income. They will also want to review the property’s historical occupancy rate, and the current and future market conditions. The bank will also look at the borrower’s experience in the real estate industry and the borrower’s experience managing multifamily properties.

The bank will also want to ensure that the borrower has a solid plan for managing the property and maintaining the units. This includes having a good understanding of the local rental market, as well as the costs associated with maintaining and operating the property.

During the underwriting process of analyzing a deal Here are the things you need to evaluate and understand before you go to the bank.

  • The property’s location, condition, and potential for generating rental income
  • Being able to explain your real estate experience, particularly in managing multifamily properties
  • The market conditions in the area, including supply and demand for rental units, vacancy rates, and trends in rental prices
  • The property’s historical occupancy rate and projected future occupancy rate
  • The property’s operating expenses, including property management fees, maintenance costs, and projected future repairs and renovations

The key to an apartment deal is free cash flow.

“What is left after all the bills are paid each month.”

When I bought my first apartment deal, my only experience was buying single family homes. I was used to providing the bank everything but blood during the loan process. When I was going through the process on the apartment deal, it was actually a whole lot easier.

All they wanted to know was how much income is the property generating monthly and what are the expenses.

I was around real estate investing for over 15 years before I learned this secret. Maybe it isn’t a secret to you, but it was to me.

Now that I know the secret my goal is to buy as much as I can.

Oh, and how did I make $100,000 in a year?

I bought at the right time first of all. I bought early 2021. The pandemic was still in full swing for the most part. So that year I saw massive gains in appreciation. Secondly, I was able to increase rents significantly in the first year.

This year our goal is to buy at least 100 apartments. If you see a deal or know of a deal and you aren’t sure you can take it down. Reach out to me and I would love to see how we could potentially partner on the deal.

Going alone in real estate is hard, it can be risky, and expensive. But if you can find great partners you can share the risk and buy bigger deals.

If you want to learn more about syndication partnerships click here.

To your success and your future.

Also, be sure to connect with us by completing the form below. We will be sharing more information on deals we are working on as well as more tips, tricks, advice and information on investing in real estate.


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