Want to Get Rich? Start Investing in Apartment Buildings!
It is not easy to get rich. Investing in real estate is one of the safest ways of getting rich. For most people this means residential real estate. But by getting started in commercial property you can become financially free faster. Most people dismiss commercial real estate as too risky and they think that lots of money is needed. But it is easier to get started than you think. It is possible to get started with little money and if done the right way the risks can be minimized.
Investing in commercial property is far from risk free, even experienced professionals make costly mistakes once in a while. Investing in apartment buildings is a good way of getting started in commercial real estate. Apartment buildings are far less risky as investment than the other types of commercial property. While companies downsize or go bankrupt in recessions, people still need somewhere to live. You also have a larger number of tenants, meaning that the cash flow will be more stable.
The main advantage of commercial real estate is that you get a nice positive cash flow, generally from day one. Even smaller deals should give a four figure positive cash flow per month. Even better, the cash flow just gets better the longer you own the property. Over time rents increase and you can refinance to get better terms. At the same time, your equity grows. This is because you are paying off the loan, meaning you own more of the building and the bank less, and because the building increases in value. Often, it is possible to do minor renovations to increase the rents which means improved cash flow. But everything that increases the income of the property also increases the value of the property. The value of commercial real estate depends on the income the property generates.
Given the advantages of commercial real estate, how does one get started? It is easier than most people think. The main problem is to muster up enough courage to close your first deal. The necessary knowledge you get from a training kit combined with field work, you need to learn the market rents and prices in your area. By finding a motivated seller, you do not need much cash to buy your first apartment building. By getting seller financing, you can close a deal without using much of your own money. The first deal is scary but it is well worth the hassle. Investing in apartment buildings is a reliable way to get rich.
