Many people know we manage single family homes, but they don’t realize we provide Fort Worth property management for small apartment complexes as well. When it comes to financing those apartment complexes, we turn to Cary Donham of Capital Concepts. He is our trusted mortgage professional. So, today we are asking him how an investor can finance an apartment complex.
Investing in Apartments
A lot of investors want to take the next step in their investing career. After buying so many single-family properties, they’ll be ready to move up to something a little bigger. Apartments are considered five units or more, where the income affects the value. One to four units falls under single-family definitions, and the values are derived simply off comps. You can increase the income on a fourplex and it doesn’t do anything to the value of the property; it’s based off what’s sold in that area. But in an apartment complex, you can buy it distressed, increase the rents and the revenue, decrease the maintenance costs, and now you have a higher valued property that you can sell in a few years for a nice profit.
Financing Options
We do all types of financing for apartments. There are portfolio products available for multi-family properties. We can finance 75 percent of your cost. That means if you have a $300,000 or $400,000 rehab project on a building, we can finance 75 percent of that into the loan. This creates a situation where there is less money coming out of your pocket, and a higher cash on cash return. It’s better for you and for passive investors. We also offer the regular Fannie Mae and Freddie Mac nonrecourse loans. We’d be happy to discuss your project with you. For more real estate investing tips, please contact us at McCaw Property Management and Capital Concepts.