Question: Is there a business plan sample or template for buying apartment houses?
Comment: I did not know there is such a thing – maybe some of these ideas will help you form a template for investing in multifamily units….
Know how much money you can put your hands on today – where is it – bank – from relatives – credit line – equity loan –
Create a credit line ( as big as you can – you’ll need it!) Credit Lines will give you the resources to make offers and the confidence to do it often – don’t abuse those funds
Learn about 1031 tax-deferred exchanges – a great way to leverage large portfolios
Complete your financial package – 3 years tax returns P&L – real estate portfolio, credit score – make 5 copies – you’ll need them
Expect to be rejected by lenders and other W-2 employees – who don’t understand your desire for wealth
Qualify lenders, bankers, mortgage brokers – ask what lending products they have – see if you qualify for them – Get a referral from a bank officer, present or CEO to the loan department. (just call them – ask – who can you refer me to in the loan department of your bank?) Referrals from higher-ups may give you a leg up to a loan approval
Look at 20 buildings before offering on any – know the SF dollar cost – keep a journal – keep good notes – follow-up
Maillots of letters (be professional NO yellow childish communications) to owners of apartment buildings. Keep it simple.
Understand what a CAP rate is and how to get to it – fill out your commercial APOD – always know the CAP rate before making offers
Verify -verify – verify all financial data given you by sellers – sellers are liars (so are buyers)
Trust NO One!
Keep a photo journal of properties looked at
Expect to over-pay or pay retail
Learn how to negotiate using the CAP and APOD to reduce price and increase NOI
Work on expired listings – that is go knock on some doors of failed to sell properties – Expired listings can make you rich
Always ask the 7 words when negotiating – IS THAT THE BEST YOU CAN DO?
Ask for more – money back at settlement – guarantees to survive settlement, all chattels in buildings, seller pays all closing, tickets to the Ravens game (or your favorite team)
Add commercial real estate to your wish list of opportunities
If you become discouraged and frustrated – go flip a few junk houses for practice and cash flow
attend auctions – watch the activity closely – meet your competition – collect cards – build a buyers list
Do something every day related to your personal real estate and financial goals DON’T GIVE UP!
Have fun – don’t take yourself too seriously – get your partner excited about your ventures – share the wealth
Learn the pleasures of COLD CALLING sellers – Talk to everyone – let them know what you do – be enthusiastic
Read financial newspapers – look for auctions – lawsuits -failure to pay taxes notices and business opportunities
Search tax sales – attend tax auctions –
Read probate ads
Sit in court – listen to cases – find motivated sellers
Create a Fiduciary Buyers Broker agreement with smart agents – pay them for a non-listed real estate.
Don’t waste your time with non-responsive agents – brokers – lenders or sellers – just move on – associate with like kind people
Be demanding – get answers – don’t be passive – at our age (I am 75) we don’t have time to waste! Do it now – get it done!
Learn contract clauses to extend – seller take back – hybrid agreements – delayed settlement – stutter clauses – assignments – subject to agreements – Control and Roll systems – substitution of collateral – subordinations – etc.
Create an Action Packet – a portable accordion file with all contracts (commercial, skinny, hybrid, long and short forms) checks, assignment agreements, notes, disclosures, business cards, addendum agreement forms – etc. BE READY TO DO BUSINESS – keep your Auction Packet with you – at home – in your car at your office – be ready to do business when business comes to you!
Have fun and keep a scorecard of your success (add up equity until you hit a million dollars NOI)
Tenants – your new responsibilities – treat them like customers – they’ll pay your mortgage if you do
Do not associate yourself with a mentor or buy expensive real estate programs unless you know for sure that the instructor or mentor has a reasonable large net worth (and can prove it) and is qualified to teach you what you need to know and how to make money in the real estate business! —-Sorry folks – the bottom line is MONEY – pay bills – invest – give it to charity – have fun.
Enjoy the exciting trip and education in the real estate investing field –
Oh! Find and read – REAL ESTATE EXCHANGES & ACQUISITION TECHNIQUES by Wm. T. Tappan, Jr. lots of great real estate formulas that will help anyone reading it and understand the many ways to control real estate.