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Ultimate Guide to buying Apartments

ultimate guide to buying apartment properties
Real Estate Investments
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Dear Friend,

When I first suggest the idea of buying apartment buildings as a means of achieving financial freedom, most people give me a weird look.

By the expressions on their faces, I know they don’t believe it’s possible.

And I can almost always predict what they’ll say next. It will be something like…

“You need hundreds of thousands of dollars to do that, right?” (You don’t, actually.)

“But I don’t have any experience in real estate investing…” (Thankfully, you don’t need any.)

In just a minute, I’ll explain why I believe apartment buildings are the single most powerful opportunity for achieving financial freedom in as few as 3 years.

I’ll also explain how you can buy your first apartment building in 90 days or less — even if you have no money to invest and no experience in real estate investing.

But first, let me tell you how I got into this “crazy” business in the first place…

Hi, my name is Michael Blank. I make my living with apartment buildings and I teach others how to do the same. 

But I got into apartment building investing somewhat by accident. I did what everyone else did. I went to college, got a degree in Computer Science, then settled into a “safe and secure” job.

I thought I had it all figured out. I thought I was on the path to financial success.

Then, at age 35, I read the book Rich Dad, Poor Dad. My eyes were instantly opened. Suddenly I realized that the path I was on wasn’t safe or secure at all!

That’s when I decided to start investing in real estate. But not apartment buildings. I automatically assumed apartment building investing was out of my reach. So I decided to start flipping single family houses instead.

I began flipping houses in 2005, and I flipped 34 of them over the course of a few years. I made good money, too.

But there was a problem, a BIG problem …

Flipping houses was a TON of Work!

I realized that if I wasn't buying, fixing or selling a house, I wasn't going to make money. There was never any residual income after selling a house. It felt like a full-time job, and I was burning out.

I then thought about building up a portfolio of single family houses instead of flipping them. But then I discovered a second problem ... 

I wasn't going to be able to replace my income with single family rentals.

One day I sat down at my kitchen counter and put pen to paper to try to figure out how many houses I would need to own to replace my income. My goal was $10,000 per month.

I felt that if I bought right in an area about an hour from my house, I could get each rental to cash flow $200 per month (I mean REALLY cash flow, including repairs and vacancies!). At that rate, I would need at least 50 houses in my portfolio.

50 rentals? How long would THAT take? (a long time!). How much work would that be? (a lot of work!)

 I became the accidental apartment building investor

One of my wholesalers contacted me about a small apartment building he had under contract. It was listed by one of his residential realtors, and he thought I should take a look at it. Which I did ... begrudgingly.

At the time, I didn't know too much about apartment buildings but after looking into it further, I discovered that apartment buildings had these two major advantages over single family house investing:

  • I could outsource the management. Most single family rental landlords manage their own property, which didn't appeal to me at all. And of the few that had property managers, they told me it was expensive (10% of income typically) and the results were inconsistent because of the quality of the managers. On the other hand, professional property management was built into the apartment building investing model. This sounded a lot better!
  • I could achieve my goals with just a handful of deals. If I needed 50 units in order to replace my income, I might be able to achieve that in just a handful of deals rather than doing 50 transactions. And once I bought a building, it would continue to pay me month after month. That's exactly what I was looking for.

4 Powerful Ways to Make Money With Apartment Buildings

I also learned that unlike with single family investing, there are four ways to make money with apartment buildings.

  1. Cash flow: this is the amount of money that is left after ALL expenses and mortgage payment.
  2. Appreciation: this is the difference between what you bought the property for and what you sell it for (minus expenses);
  3. Loan Reduction (aka "Amortization"): the amount by which your tenants paid down your mortgage balance; and
  4. Sponsor Fees: if you're going to raise money for the deal (which you should!), then you are entitled to certain fees for "syndicating" the deal.

For example, you can pay yourself an acquisition fee when you close on the property (typically around 3% of the purchase price).

You can also charge an "Asset Management Fee" (typically 1% of the money raised each year you own the building) and an "Asset Disposition Fee" (typically 1% of the sales price when you sell the building).

Unlike any other investment in the world, apartment buildings have 4 profit centers.


Based on my own experience and observing other full-time (and independently wealthy) real estate investors, I came to the conclusion that