I discovered six reasons that made apartment buildings superior to single-family house investing:
#1: Apartment Building Investing is More Passive

Unless an investor has a large portfolio of houses, it’s not common to have a property manager manage the houses. I found that most of the time, investors were self-managing their houses.
On the other hand, with apartment buildings, professional property management is built into the business model. Once I found a good property manager, he or she would find and pre-screen the tenants, answer phone calls in the middle of the night and handle repairs, collect the rent, and track all of this with reports that I could review.
The passive nature of apartment building investing appealed to me over the more active work of single-family house investing.

#2: You Can Control the Value of an Apartment Building
I knew that the value of single-family houses was determined by what other houses in the same area sold for in the last six to twelve months. Even with a rental property, if one got a little more rent than the other, it would be valued about the same, all things being equal.
With apartment buildings, and commercial real estate in general, it’s different 먹튀검증업체. It’s much less about comps and much more about how much net income the property produces. The more income it produces, the higher the value. I could have two identical buildings next to each other, and one could be worth more because it produces a higher net income than the other.
The implications of this are enormous: I could buy an underperforming building, perhaps one whose rents are low, expenses are high, and I could increase the income and decrease the expenses (perhaps by the use of a professional manager). As a result of those efforts, the property could be worth substantially more than before. It didn’t depend on how much the

building next door sold for; it was solely dependent on how much net income it was producing.
With apartments, I wasn’t dependent as much on market forces I couldn’t control; instead, I could control the value by influencing the net income it could produce.
#3: Apartments Are Less Risky Than Houses
According to the Housing Finance Policy Center 2015 Chartbook, the Freddie Mac delinquencies peaked for single-family houses at about 4% in late 2009 (FHA delinquencies was even higher at 9%). At the same time, delinquencies for multifamily properties peaked at 0.4%, and that included the hardest-hit areas (California, Arizona, and Florida). In other words, multifamily delinquency rates were 90% lower than the residential rate during the worst economic downturn since the Great Depression. This might explain the next point.
#4: You Can Get Cheap and Unlimited Financing
Because of the recession, there were now limits to how many houses someone could finance with bank loans. Through long-term banking relationships, some investors were getting around that through commercial loans. But they were almost always personally guaranteed?meaning, if they lost a house, the bank could go after their personal assets.
But banks were lining up to fund apartment buildings. The interest rates were incredibly low, and in many cases, you could get nonrecourse loans, which means they didn’t have to be personally guaranteed. Best of all, there was no limit to how many loans you could have … the sky was the limit.

#5: You Can Get Paid for “Syndicating” Apartment Building Deals
Syndication is the process of finding deals, raising the down payment from private investors, and putting the deal together. What I discovered is that syndicators get paid for doing this in three ways:
Upfront. Syndicators can get paid when they purchase a property with an acquisition fee, which can range from 1% to 5% of the purchase price. The acquisition fee is compensation for all the work the syndicator has done up to this point?including looking at dozens of deals that didn’t work out, negotiating and closing this deal, finding the investors, risking the down payment, and organizing the whole thing. Without the syndicator, there would be no deal.
While they own the asset. The syndicator gets “sweat” equity in the deal, typically, from 10% to 30%. They are sometimes also paid an asset management fee, which is a percentage of net income.
When they sell or refinance the asset. The syndicator can be paid a “capital transaction” or “disposition” fee (1%?3% of the sales price) when they sell the asset.
I discovered that I could be compensated and build my portfolio just by syndicating deals!

#6: Apartments Are More Scalable
When I revisited my goal of achieving $10,000 of passive income per month, I determined that I might need to syndicate and control about one hundred units. Rather than buying fifty single-family houses (which would take a lot of work and time), I could probably control one hundred units in just a handful of deals in the next three to five years. At that point, I could quit and sit on the beach, or I could just keep going and build a legacy I could pass on to my children.
Of all the businesses I had done?software, flipping, rentals, short sale negotiation, options trading, and restaurants?only apartment buildings had a unique combination of passive income, control, favorable risk profile, availability of financing, and scalability.

The New Plan
From that point forward, my plan was to focus only on apartment buildings. I dusted off the old apartment building books and began looking for deals in the DC area, where I had flipped three dozen houses. This new plan had to work because my restaurants were losing money, and I had no other source of income. And going back to a regular job was unacceptable to me. There was no Plan B, and I knew I had to make it work.
But I had two problems: I didn’t have any money to invest, and I didn’t have the experience. Despite my house flipping resume, brokers and sellers weren’t taking me seriously because I hadn’t done a multifamily deal before. It was frustrating, and I felt stuck.

I thought I needed a ton of money to get started, but then I discovered that I could raise it from private individuals, and they were GLAD I asked them to invest. I then discovered some tricks that encouraged brokers to take me seriously and ask me about my track record. And I’m going to share these tricks with you.
In 2011, one of my wholesalers contacted me about a 12-unit apartment building in Washington, DC, he had under contract. It was listed by one of his residential realtors, and he thought I should take a look at it. I ended up closing on the deal?with none of my own money.
Let me share with you how that first (small) deal made me $40,000 per year so that you can understand the power of apartment buildings.

From that point forward, my plan was to focus only on apartment buildings. I dusted off the old apartment building books and began looking for deals in the DC area, where I had flipped three dozen houses. This new plan had to work because my restaurants were losing money, and I had no other source of income. And going back to a regular job was unacceptable to me. There was no Plan B, and I knew I had to make it work.
But I had two problems: I didn’t have any money to invest, and I didn’t have the experience. Despite my house flipping resume, brokers and sellers weren’t taking me seriously because I hadn’t done a multifamily deal before. It was frustrating, and I felt stuck.
I thought I needed a ton of money to get started, but then I discovered that I could raise it from private individuals, and they were GLAD I asked them to invest. I then discovered some tricks that encouraged brokers to take me seriously and ask me about my track record. And I’m going to share these tricks with you.
In 2011, one of my wholesalers contacted me about a 12-unit apartment building in Washington, DC, he had under contract. It was listed by one of his residential realtors, and he thought I should take a look at it. I ended up closing on the deal?with none of my own money.
Let me share with you how that first (small) deal made me $40,000 per year so that you can understand the power of apartment buildings.