You’re ready to do your first deal and you’ve chosen an apartment as your first investment.

It’s a good choice. In fact, we have great news – apartment building syndication. We believe it’s the best investment on the planet.

What do you need to know?

Here’s what to look for when buying an apartment as your first investment

 

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Focus on Your Strengths

As you’re getting started with apartment building investing, you likely have the intention of quitting your W-2 job sooner rather than later.

One of the key ways you can accelerate your progress is leveraging your strengths.

Maybe you’re a math person and you love to crunch numbers, but maybe an Excel spreadsheet causes you to break out into a sweat.

It’s important that you know yourself – your strengths and weaknesses – so you can focus on what you do well and partner with someone who complements you.

You might be a dealmaker. You might be a capital raiser. If you’re good at raising money, you’ll want to find a partner who is good at finding deals.

Knowing your strengths will help you do better deals and more of them with the least amount of resistance.

This leads to the second thing you need to consider when looking at your first investment.

Real Estate is a Team Sport

Of course, you can go it alone, but it will be a tougher road to walk and will take a long time.

On your own, you’re going to want to do small deals and scale up very slowly.

It’s much more exciting and fulfilling to do your first deal with a team. That’s where your strengths and weaknesses come into play. Each member of the team will focus on what they do best.

Where Does the Money Come From?

You may be surprised to learn that you actually don’t need to be rich to invest in apartments.

The truth is, you’re not going to be spending your own money. You’re going to raise it from private individuals.

Even better, these people are going to be more than happy to hear about your deal because what you’re offering them is the best place for them to invest their money.

You’ll want to grow and nurture your network, because their money is going to fund your deal. Contrary to what you may think, your friends and family are a great place to start.

As you’re looking at your first deal, talk about it. Talk about your plans. Talk about the opportunity. Let people know what you’re doing and how they can benefit from investing with you.

Remember that most people are wondering if the stock market is the only thing out there, because they can't seem to make it work. You’re offering a better alternative.

Hidden capital is everywhere.

Location

When you’re looking for your apartment building, you want to select a market that makes sense for you. It needs to have enough resources – inventory and managers – to ensure you’ll be able to operate well.

If you buy into a market where there are already a lot of people doing deals, you’ll have a more difficult time breaking in.

Look for a market where there is job growth and population growth, that’s not yet overheated.

With the right strategy, you can make money in any market, but why not choose the easiest path to success?

Related to location, you’ll want to consider value.

ROI

ROI, or return on investment, is a gauge of an investment’s profitability.

One thing we always look for is value-add property.

Value-add real estate is a property that already has existing income, but requires some improvements to provide good returns. This property might be in need of renovation, or maybe it’s been poorly managed and the rents haven’t been raised in years – but it has potential.

With a few upgrades, you can attract tenants, charge more rent, and increase the property’s net operating income (NOI).

A value-add deal will allow you to build the most wealth in the shortest amount of time. This strategy is one of the best for investors just starting out, as well as those with more experience, because it provides an increasing cash flow through rental income and a good return on investment (FOI) upon sale.

Once you close on your first deal, opportunities for second and third deals are triggered in rapid, automatic succession. As you're considering your first investment, you're also laying the groundwork for your future success.