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MrJimBeam
New Orleans Saints Fan
Member since Apr 2009
3828 posts

Buying A Large Apt Complex
So I’ve been looking into this recently and haven’t dived into this realm yet. For argument’s sake, let’s say it’s a 30 unit complex worth 1.6 million and you have a good relationship with a bank currently owning some single family properties. Obviously this is a different world of REI, so I wanted to see what are some of the bigger issues to have in order. I have a good RE tax guy that has helped along the way but was curious of further guidance. Thanks for any responses to the best board on TD


Rendevoustavern
LSU Fan
First floor Ourso
Member since May 2018
456 posts

re: Buying A Large Apt Complex
18 units in Montrose, Houston, Tx.

You want finance, development, headaches, or what other kind of guidance.


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Cdawg
Houston Astros Fan
TigerFred's Living Room
Member since Sep 2003
53195 posts

re: Buying A Large Apt Complex
quote:

Large Apt Complex


quote:

30 unit complex worth 1.6 million



With that out of the way, you plan on being the manager?


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70
baldona
Auburn Fan
Florida
Member since Feb 2016
11370 posts

re: Buying A Large Apt Complex
I'm guessing they are pretty old for being $60,000 each?

Are you going to have someone on site? Is there an office? If not, I'd probably make it 29 units with an office.

I don't have any experience with it, but I'd make sure the money is right unless this is a retirement gig for you.

ETA: The issue with apt complexes is a lot of them are built in up and coming areas that then come and go. No one wants to live there anymore in the units built in the 90s and early 2000s. So you are chasing the bottom and getting crappy tenants. Now if you can buy one built many years ago in a good location that is likely to improve, absolutely.

I'd also consider the long term land play. $1.8 for a chunk of land that fits 30 single floor units could be worth a lot one day or even now or very soon.
This post was edited on 2/12 at 4:13 pm


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soupboy10
Member since Feb 2016
28 posts

re: Buying A Large Apt Complex
I finance large apartment complex’s and they are looked at differently but terms are very attractive.

I am a commercial banker and work for a larger bank that loves these deals. They work pretty well.


nugget
LSU Fan
Los Angeles, CA
Member since Dec 2009
9682 posts

re: Buying A Large Apt Complex
quote:

I finance large apartment complex’s and they are looked at differently but terms are very attractive.

I am a commercial banker and work for a larger bank that loves these deals. They work pretty well.


What terms are typical for someone with a small portfolio with prior experience? For example, what would the terms be like on this deal? 80% LTV? Interest only at first? How long would the note be?


jimbeam
USA Fan
University of LSU
Member since Oct 2011
59253 posts

re: Buying A Large Apt Complex
Aren’t they typically 10 year 75%LTV?


soupboy10
Member since Feb 2016
28 posts

re: Buying A Large Apt Complex
quote:

What terms are typical for someone with a small portfolio with prior experience? For example, what would the terms be like on this deal? 80% LTV? Interest only at first? How long would the note be?


Nugget - we require 25% down and typically a 10 year term with a 20 or 25 year amortization. Prior experience is nice but not necessarily required.


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nugget
LSU Fan
Los Angeles, CA
Member since Dec 2009
9682 posts

re: Buying A Large Apt Complex
quote:

Aren’t they typically 10 year 75%LTV?


Apparently. But I could go to a local bank and get 85 on a 10/20 for something like what the OP suggested. Any bigger than that and I’m sure they would tell me to kick rocks.


hey benji
New Orleans Saints Fan
new orleans
Member since Sep 2013
122 posts

re: Buying A Large Apt Complex
Nugget, what’s your contact info?

I have a few questions for you.


Jag_Warrior
Virginia Fan
Virginia
Member since May 2015
1316 posts

re: Buying A Large Apt Complex
quote:

I wanted to see what are some of the bigger issues to have in order.


I don’t know what sort of mix you’re looking at (1, 2 and/or 3 bedroom), but your appraisal contingency will help you there.

Also, taking the age of the building(s) into account, take a close look at the maintenance records and any capital improvements that have been made.

Depending on how the numbers play out, this could be THE deal that takes you to a different place. Good luck.


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Peejack84
LSU Fan
Lafayette
Member since Aug 2019
70 posts

re: Buying A Large Apt Complex
I got a 80% LTV, 5-yr term 20-yr amortization on a small 9-unit in BR. The process was pretty damn easy to be honest.

You DO NOT need onsite management for 30 units.


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31
audioaxes1
Member since Jul 2019
31 posts

re: Buying A Large Apt Complex
30 units isnt a large complex by any means. But either way as real estate investor I would not recommend taking on something of that size until you have some extensive experience and connections under your belt... i'd say atleast experience owning/managing a quadplex and some rehabs. I also think this would be better asked on biggerpockets
This post was edited on 2/13 at 12:27 pm


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nugget
LSU Fan
Los Angeles, CA
Member since Dec 2009
9682 posts

re: Buying A Large Apt Complex
NuggetTD@mail.com


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Jag_Warrior
Virginia Fan
Virginia
Member since May 2015
1316 posts

re: Buying A Large Apt Complex
I'm not sure how large Fat Bastard has gone with his real estate purchases, but I figure that he'd be a good one to chime in here. He always has some good input on real estate matters.


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