You might be skeptical that you can get any kind of decent cash flow and a reasonable return from a regular apartment building deal if you get other investors involved. I mean, is the pie really big enough for everyone?
It most certainly IS possible to make this work. Let’s take a look at a fictitious deal but make some real-world (and conservative) assumptions.
While we always try to buy at a discount and then try to double the value of the building in 3-5 years, the example that I’m going to describe does not assume either. In other words, we’re going to talk about a boring deal that still works. Chances are, if you try a little harder, you should be able to do a lot better.
But let’s stick with a conservative example to prove our point. Let’s see how we can nevertheless create a good return for our investors and ourselves.
Watch the short video below, in which I use the Syndicated Deal Analyzer to analyze our fictitious, boring 20-unit deal.
Here are the key take-aways from this video:
- Deals bought with investors CAN cash flow and yield attractive returns – for you and your investors.
- You don’t necessarily have to buy a killer deal. Sometimes buying a profitable ATM machine is all that it takes. OK, then maybe buy a few more -;)
- Raising money from others lets you do as many deals as you want to.
- Raising the income (or lowering the expenses) even by a little bit can make a HUGE difference in the returns.
As you can see by now, it's useful to have a financial model like the Syndicated Deal Analyzer (SDA). It makes analysis so much faster. Like other real estate strategies, this is a number's game: the more deals you can analyze, the more offers you can make, and the more deals you'll get done. You need the SDA to get started with apartment building investing.
To your success!