Just bought my first foreclosure and painted one of the bedrooms and hosted an airbnb guest for one night. They checked out after downsizing from seven night reservation. The cash is incoming.
Wow! You are an amazing teacher. I felt that you indeed cared for your students, and wanted us to be well equipped and motivated for success. Information was spot on. Thank you.
Should a new investor tell bank..."Hey I'm using your money for my investment property." in others please do a video on confronting the banks! As a beginner
Great video Peter, even though it was many years ago. I’m just getting started, I’m here in northern Cali and there is an apartment bldg 47 units going for 3.5 million open to reasonable offers. So much great content!
Mr. Harris. Excellent video. I've owned small apartment buildings in California, so am aware of most of the pitfalls. I've been looking in N. Florida for the past year. This is late 2015, and really, there doesn't seem to be anything of value, and I've looked at probably 50 complexes. Do you think, with the demand from the hedge funds and other large buyers, the market has become over valued (overpriced in relation to net cash flow)? Thank you.
excellent job demystifying the processes involved! thank you for the excellent information. Is there oppty for any type of mentorship? I would love the chance to participate in all the steps mentioned prior to investing my own money. thanks!!
i disagree.. if your starting out dont hire a property manager.. they take 10-15% of the gross each month. a property manager will never replace you the actual owner being there. ive had my properties 15 years and the first 2 years were very hard but i learned alot and ithey flow good cash. when you are established and have multiple properties then think about manager. you dont need when you have 3-4 apartments.
The difference is scale. 3 to 4 units is not even considered Commercial in my mind. But if your first deal is a 30 unit; better to hire the best property manager and then learn all they know then to re-invent the wheel
When getting financing from private sources i.e. not banks, how do the repayments work? Would it typically be the same as a bank where monthly you're paying each investor back proportionally to how much they invested plus some interest amount? Or is it really all to what you and those private investors agree upon?
in NYC we have expensive properties in Manhattan and the other boroughs. should my first investment be in Manhattan where real estate has high rents or should I concentrate in the outer counties ? thanks for your help I'm studying all of your videos
Manhattan real estate is a high volume/high investment game. See if you can find some good deals in the South Bronx or Kinsgbridge Heights areas. Although, those have gotten hot lately, so you will have to hustle.
I be looking in to investing in to small apartment buildings Soom starting with one at a time yearly by buying one small building at a time bi yearly near the future action plan over time. I'm slowly educating my self with vedios like this very useful strategy plans that's your videos have. First I'm researching creative seller or owner financing for small muti family unit apartments first not to big to start off with that's in my financial means that I earn at my 40 a week job currently.
Peter, I want to review the financials of your first deal that you presented in the video to ensure I heard you correctly. You bought the property for $720,000. You put 20% down ($144,000) but received $45,000 cash back at closing. Thus, your net investment in the property after closing was $99,000, correct? You then stated the property cash flowed $6,500/month. This equates to $78,000 per year. Is everything correct thus far? If so, that means your annual cash on cash return on this deal was an amazing 78.8%! That seems unlikely to me. What am I missing? Regards, Troy
Those are correct numbers. That's a good deal, isn't it? Multi family is really hot right now and those numbers are more difficult to come by. But it shows you want is possible.
Mr. Harris, thank you very much for your excellent video. Would you happen to have any advice on buying apartment units in Japan? Thank you for your time.
Condos and apartments always fall in price. Most people who bought an apartment 40 or 50 years ago couldn't sell it for more than what they paid back then. Almost everyone loses money on an apartment or a condo. By the way I live in Canada.
These are renters you fool. Rent doesnt go down. Money is still made with renters. That is why multi units are better than buying and renting out single homes
Peter....1st of all, Thank you for all of the greatest videos you shared on the TH-cam. I really want to get into the apartment building, but. 1 thing that keep worrying me is HOW TO DEAL WITH THE TENANTS THAT IF THEY HAVE THE WATER ON ALL DAY or THEY LEAVE THE WINDOWS OPEN DURING WINTER TIME. Thanks
Question for you Mr Harris. When you said in the video you put down 20% on the down payment; does that mean you put down $144,000? Did the lender borrow you the money, or you had cash? Thanks. Very educational. I live in Ireland and I'm an aspiring multi-family investor. I'm still studying the market.
Good evening Peter...? Great video learned much today...? What do you consider is to much rehab costs for a beginner in vesting in Apartment multi-plex?$5K - $10K or $10K - $20K? Or is it based on the time of the rehab not so much of the cost?
Peter, can you please explain further on this point. Are you stating that I should look for property that does not require maintenance, or something else?
Can i verify the seller's annual realized rental income by asking for their Schedule E from their tax return? I can understand that the expenses on their return wouldn't be accurate, as they could easily pad the expenses on the return, but I would image that the income would be accurate.
Where did you find the building for 16K per unit? Everything in my area in New Jersey is around 100k at a minimum and When I run my numbers cash flow is Between 2 and 6% If everything goes according to plan which it never does. I don't know what I'm missing but people are paying high prices I'm not sure for what
I understand about not trusting the real estate brokers numbers in the brochure, however how do you know that the seller's numbers are any more reliable?
There is a private seller who has a 31 unit but it needs repairing not much. She has a asking price. Is it smart for me to invest or no?? Also I would need a loan and would it be smart to take out a mortgage for the down payment??
What about the debt, its the only thing that makes me worry. I know its good debt, I can get 3.99% for 25 years however Doing that I wont have exist strategy, for example I wont be able to sell the apartment because the interest will be above property value. I would love an advice on this matter
How come?, For example an apartment worth 100k so with 20% down payment the loan amount will be 80k. So for for 25 years at 3.99% the total loan will be 80k + interest which is 126,560. After 5 years 25,320 will be paid off of 126,560 since monthly payment is 422. So in order to make profit, the property need to Appreciate at least at 1% every year. otherwise I wont be able to cover the mortgage because 101,240 will be left of the mortgage and the property value is 100k ( assuming buying at market value)
The principal balance of the loan would be less than the market value the whole time that you own it. So you could sell at any moment and not be concerned about being upside down. As to your calculation of interest; you are missing many other factors in your calculation like the time value of money, inflation, etc. Borrowing money at 6% long term and fixed when the property has a CAP rate of 8-10% puts you in the money zone at all times.
Commercial Property Advisors thanks for the feedback I really appreciate it. 1 more question, you said principle balance of the loan. Does that mean when I want to close a mortgage I pay principle balance only? I think that really depends on the bank.
I have my eye on a property that is run down an not in use. it is in the projects. has about 30 or more units. it needs rehab work. we have a 2 year waiting list for pubic housing I was thinking about converting it to that. considering there is such a long list what do you think about it.
Get started investing in apartments today! Apply to be my next protege here: www.commercialpropertyadvisors.com/protege-program
He is a very good instructor: doesn't talk too quickly, is clear, helps us understand the breakdown of each topic, very genuine person
All of your videos are first class. Keep 'em coming.
Very easy to understand and straight to the point. You are the real deal sir. Thanks for sharing the knowledge.
Just bought my first foreclosure and painted one of the bedrooms and hosted an airbnb guest for one night. They checked out after downsizing from seven night reservation. The cash is incoming.
Great video and instruction, it’s like being in an actual classroom. Keep up the great job Sir.
Can you do a video about this now that it is 2020, I'm interested in apartments.
He's right. It's ALL about management, management, management.
Wow! You are an amazing teacher. I felt that you indeed cared for your students, and wanted us to be well equipped and motivated for success. Information was spot on. Thank you.
I too love commercial real estate because it is less emotional. Thanks much Peter.
Clear and concise. Straight to the point. Thank you kindly, for the lesson.
Keep up the great work!!!
Should a new investor tell bank..."Hey I'm using your money for my investment property." in others please do a video on confronting the banks! As a beginner
Practical and inspirational! Thanks, Peter.
One of the best videos I've seen. I'm a seasoned investor looking for my first apartment deal this year. Thank you, sir
Martin Saenz 0
Could you do a detailed video on different exit strategies??? Thank you!!
I am an apartment owner. Your information is spot on. You are clearly the real deal.
Great video Peter, even though it was many years ago. I’m just getting started, I’m here in northern Cali and there is an apartment bldg 47 units going for 3.5 million open to reasonable offers. So much great content!
I'm 21 and in demand for apartment since most young people can only afford apartments
I love your videos you have the BEST! Real estate video I watched so far and I watched a dozen lol
Thanks I enjoyed and learn something from your video!
Thank you so much for providing wealth of information. Did you actually went and see 70 properties before you buy your first apartment?
Well, you may have posted this video in 2014, but it is still very useful today. Thank$ a million, literally.
Thanks for your useful advice
this channel is just what i was looking for... what a goldmine. Where can I leave a review?? Lol
Six years later you are right on point 🎯🎯🤯
Oh yeah I was thinking about your list of things before purchasing….I would think “MINDSET” would be #1 instead of #6 lol! Thanks Peter!
awesome video man
Excellent video, thanks for sharing.
Already I can agree there's excellent detail plus organized presentation done here.
Mr. Harris. Excellent video. I've owned small apartment buildings in California, so am aware of most of the pitfalls. I've been looking in N. Florida for the past year. This is late 2015, and really, there doesn't seem to be anything of value, and I've looked at probably 50 complexes. Do you think, with the demand from the hedge funds and other large buyers, the market has become over valued (overpriced in relation to net cash flow)? Thank you.
Love the video! You said you analyzed 70 deals before you bought your first, Where did you find the 70 deals?
Amazing video, where can I contact you to make some deal together? I’m real estate agent and I want a partner just like you!
this is great information!!!
Thanks for your video!😁
This is the Best and Useful video! Thank you so much teacher.
Five star information sir.THANK YOU.
Thank you !
Thanks!! Good stuff!!
Nice tutorial, thank you 🙏 Mr. Peter .
Peter, can you update your recommendations now that multiple markets are over saturated and people are afraid of a downturn in the real estate market.
The fundamentals remain strong. There is always fear of a downturn.
thank you for the video! very insightful. I'm interested in getting started (as the quote states) with zero knowledge.. gotta start somewhere right?
excellent job demystifying the processes involved! thank you for the excellent information. Is there oppty for any type of mentorship? I would love the chance to participate in all the steps mentioned prior to investing my own money. thanks!!
Learn more here: www.commercialpropertyadvisors.com/protege-program
Peter Harris is a Gold Mine !!
Excellent and clear video full of information, thank you!
thank you
i disagree.. if your starting out dont hire a property manager.. they take 10-15% of the gross each month. a property manager will never replace you the actual owner being there. ive had my properties 15 years and the first 2 years were very hard but i learned alot and ithey flow good cash. when you are established and have multiple properties then think about manager. you dont need when you have 3-4 apartments.
The difference is scale. 3 to 4 units is not even considered Commercial in my mind. But if your first deal is a 30 unit; better to hire the best property manager and then learn all they know then to re-invent the wheel
…so you just ran them by yourself?
Thanks man
what would be some examples of rehabs that apartments generally see and need? what do you mainly look for that would turn you away from an investment?
Thanks for your videos brother you make easy
Inspiring and instructional
Thanks Peter great vid
Very helpful and thank you
Very helpful and detailed explanation .
When getting financing from private sources i.e. not banks, how do the repayments work? Would it typically be the same as a bank where monthly you're paying each investor back proportionally to how much they invested plus some interest amount? Or is it really all to what you and those private investors agree upon?
"All to what you and those private investors agree upon"
it depends on what type of corporation you've created with your investors. Will you be a C corp, S corp or an LLC? learn the difference.
Thank you for doing this video.
Great advice and great personality!
Great vid big bro. I would love to know what does 'owner financing' means?
Another great video! At what point during the analysis process do you ask the seller for 12 months of financials? Prior to offer?
Once it is under contract
Very informative. Thank you so much!
in NYC we have expensive properties in Manhattan and the other boroughs. should my first investment be in Manhattan where real estate has high rents or should I concentrate in the outer counties ? thanks for your help I'm studying all of your videos
The boroughs. You are looking for high returns.
Manhattan real estate is a high volume/high investment game. See if you can find some good deals in the South Bronx or Kinsgbridge Heights areas. Although, those have gotten hot lately, so you will have to hustle.
+charlene judd It's been a year since you made this comment. How's your portfolio looking?
yea ^
@@CommercialPropertyAdvisors I don't know any we are in New York City that you can find a cash flowing property at least one with a decent return
What about factoring the cost of taxes into savings account? Do the taxes eat into the savings?
"Apt Investing for Beginners" sound better Than these books that are titled "...for Dummies" I never bye them. But good videos.
Great vid. Thanks bro
I be looking in to investing in to small apartment buildings Soom starting with one at a time yearly by buying one small building at a time bi yearly near the future action plan over time. I'm slowly educating my self with vedios like this very useful strategy plans that's your videos have. First I'm researching creative seller or owner financing for small muti family unit apartments first not to big to start off with that's in my financial means that I earn at my 40 a week job currently.
Thank you. Love your videos.
Peter,
I want to review the financials of your first deal that you presented in the video to ensure I heard you correctly. You bought the property for $720,000. You put 20% down ($144,000) but received $45,000 cash back at closing. Thus, your net investment in the property after closing was $99,000, correct? You then stated the property cash flowed $6,500/month. This equates to $78,000 per year. Is everything correct thus far? If so, that means your annual cash on cash return on this deal was an amazing 78.8%!
That seems unlikely to me. What am I missing?
Regards,
Troy
Those are correct numbers. That's a good deal, isn't it? Multi family is really hot right now and those numbers are more difficult to come by. But it shows you want is possible.
I have been hearing alot about wholesaling apartment buildings. What do you think about this?
great presentation. clear and precise.
Mr. Harris, thank you very much for your excellent video.
Would you happen to have any advice on buying apartment units in Japan?
Thank you for your time.
This is gold...This guy know his craft.
The best thing about investing in apartments is when you lose all your money you can jump from the top floor of your very own apartment building.
+parkerbohnn Who loses money on apartments? Dumb comment.
Condos and apartments always fall in price. Most people who bought an apartment 40 or 50 years ago couldn't sell it for more than what they paid back then. Almost everyone loses money on an apartment or a condo. By the way I live in Canada.
These are renters you fool. Rent doesnt go down. Money is still made with renters. That is why multi units are better than buying and renting out single homes
Nikki Jones
Not when there's no one to rent your houses, townhouses, apartments, duplexes or triplexes. Renters always win owners always lose.
parkerbohnn Every apartment builidng has renters! Investors do better any day over agents.
Love your video a lot of information
Hello Peter, would you recommend getting a home inspection?
thank you much, very helpful.
great vid,I've learned a lot .
Thanks for these video's. I'd love to do a deal.
Peter....1st of all, Thank you for all of the greatest videos you shared on the TH-cam. I really want to get into the apartment building, but. 1 thing that keep worrying me is HOW TO DEAL WITH THE TENANTS THAT IF THEY HAVE THE WATER ON ALL DAY or THEY LEAVE THE WINDOWS OPEN DURING WINTER TIME. Thanks
It's always best to transfer utilities into the Tenant's names; even if the cost to make that change is significant.
Thank you.
great job Peter
Thanks a lot it's practical
'persistence and nice suit pays off'' Peter harris haha
Multi family
Thanks brother much love.
great video thank u
......thank you sir
Video is fantastic - thank you!
Solid video
thank you for thia amazing video
Question for you Mr Harris. When you said in the video you put down 20% on the down payment; does that mean you put down $144,000? Did the lender borrow you the money, or you had cash? Thanks. Very educational. I live in Ireland and I'm an aspiring multi-family investor. I'm still studying the market.
roger
thanks
+Dapo Nuga Yes, I had the cash. I got it from selling a few single family homes I had owned at that time.
vs I
777-- You actually can using creative financing! I don't know where you get your info from but it's not from an investor.
How do you handle maintenance of the apartment building? Do I need to fix things myself or hire someone?
+GamingDonks Watch this video to answer your question: th-cam.com/video/iICO3ah_Zh0/w-d-xo.html
Good evening Peter...? Great video learned much today...? What do you consider is to much rehab costs for a beginner in vesting in Apartment multi-plex?$5K - $10K or $10K - $20K? Or is it based on the time of the rehab not so much of the cost?
If you are going to go over $3,000 per unit (more than cosmetic paint and carpet); that's when you enter a different realm.
Peter, can you please explain further on this point. Are you stating that I should look for property that does not require maintenance, or something else?
Can i verify the seller's annual realized rental income by asking for their Schedule E from their tax return? I can understand that the expenses on their return wouldn't be accurate, as they could easily pad the expenses on the return, but I would image that the income would be accurate.
Why not? Never hurts to ask.
Where did you find the building for 16K per unit? Everything in my area in New Jersey is around 100k at a minimum and When I run my numbers cash flow is Between 2 and 6% If everything goes according to plan which it never does. I don't know what I'm missing but people are paying high prices I'm not sure for what
This video was shot several years ago when price per units were much less and it also wasn't in your area
I understand about not trusting the real estate brokers numbers in the brochure, however how do you know that the seller's numbers are any more reliable?
You would still verify the Seller's data because of course Sellers can lie too.
@@CommercialPropertyAdvisors thank you, where would you verify the sellers data?
Depends on the deal itself as to how best to do that.
Thanks
There is a private seller who has a 31 unit but it needs repairing not much. She has a asking price. Is it smart for me to invest or no?? Also I would need a loan and would it be smart to take out a mortgage for the down payment??
+Willie Taylor It requires a tremendous amount factual, verified data, for me to provide you with sound advice on what to do with a deal.
I'm inspired 🙏🏽
expenses are 50% of income, do you mean cash flow?
thank you for this excellent video. What the least cap rate do you shoot for when looking for a good deal?
Depends on the asset type and class
thank you for your immediate response. Lets say the asset type is at least 15 units in Class C, B, and A. What would be the lest cap rate?
What about the debt, its the only thing that makes me worry. I know its good debt, I can get 3.99% for 25 years however Doing that I wont have exist strategy, for example I wont be able to sell the apartment because the interest will be above property value. I would love an advice on this matter
Not correct. The loan amount would be MUCH less than the value.
How come?, For example an apartment worth 100k so with 20% down payment the loan amount will be 80k. So for for 25 years at 3.99% the total loan will be 80k + interest which is 126,560. After 5 years 25,320 will be paid off of 126,560 since monthly payment is 422. So in order to make profit, the property need to Appreciate at least at 1% every year. otherwise I wont be able to cover the mortgage because 101,240 will be left of the mortgage and the property value is 100k ( assuming buying at market value)
The principal balance of the loan would be less than the market value the whole time that you own it. So you could sell at any moment and not be concerned about being upside down.
As to your calculation of interest; you are missing many other factors in your calculation like the time value of money, inflation, etc. Borrowing money at 6% long term and fixed when the property has a CAP rate of 8-10% puts you in the money zone at all times.
Commercial Property Advisors thanks for the feedback I really appreciate it. 1 more question, you said principle balance of the loan. Does that mean when I want to close a mortgage I pay principle balance only? I think that really depends on the bank.
I have my eye on a property that is run down an not in use. it is in the projects. has about 30 or more units. it needs rehab work. we have a 2 year waiting list for pubic housing I was thinking about converting it to that. considering there is such a long list what do you think about it.
Sounds like a deal for an experienced public housing investor.
I'm mad I've been watching his content for so long w/o taking any action smfh
It's ok. Get started now and make it an incredible 2020!!!
There's still time to take control Adrian