How To Find Apartment Buildings & Communities For Sale That Can Turn A Profit

In the world of real estate investing, there are few ventures that offer the potential for stable, long-term returns quite like apartment buildings.

Whether you’re a seasoned investor looking to expand your portfolio or a novice eager to break into the market, there are plenty of reasons to invest in your very own apartment building. With a well-located and well-maintained property, you can generate passive income and potentially build wealth. [1]

Unlike single-family homes, which typically have one tenant, apartments have multiple units, meaning multiple streams of rental income. This is why multifamily properties like apartment communities and condominiums are known for their consistent cash flow.

This diversification can help mitigate risks associated with vacancies or tenants who don’t pay rent on time. Additionally, rental income from apartment communities tends to be more stable over time, as demand for rental housing usually remains strong regardless of economic conditions. This reliable cash flow can provide investors with a steady stream of income to cover expenses and produce profits.

Speaking of diversification, apartment buildings are the perfect addition to your investment portfolio. A diversified portfolio can lower the risk of a total loss. 

If you invest all your capital in stocks and the stock market crashes, then you may lose everything. But by diversifying into other markets like real estate, you can reduce that risk of total loss because it has low correlation with other asset classes. [1]

Regardless of your investment strategy, the first step is finding the right apartment building to purchase. But where exactly can an investor find these coveted properties for sale? Here we will explore some of the most commonly used avenues for discovering apartment buildings ripe for investment.

Online Real Estate Marketplaces

Thanks to the Internet, social media, and other digital platforms, property hunters now have a go-to resource for real estate investments in the form of online real estate marketplaces. These platforms are perfect if you want to find apartment communities that are already for sale. [2]

Online real estate marketplaces are abundant and offer a convenient platform for finding apartment buildings for sale. Websites like Zillow, Realtor.com, and LoopNet are popular options that provide extensive listings of commercial properties, including apartment buildings.

These platforms allow users to filter their search based on various criteria such as location, price range, number of units, and amenities. [2]

Real estate investors can find prospective investment properties by checking the detailed descriptions and high-quality images that are featured in these platforms. Some online marketplaces even offer virtual tours, allowing buyers to evaluate potential investments thoroughly from the comfort of their own homes.

Real Estate Agents and Brokers

A real estate agent is a professional that represents real estate sellers or buyers. Some work for a licensed broker while others work independently. Real estate agents work on commission, earning a part of the property’s sale price. [3]

Experienced real estate agents and brokers can be invaluable allies in the search for investment properties.

These real estate professionals have access to extensive networks and databases that can help you identify potential properties that match your criteria. Agents and brokers often have listings readily available and can guide you through the entire process, from property search to closing the deal.

Many real estate agents and brokers have online platforms where they showcase available properties. This allows investors to check out available listings before seeing them in person.

Another advantage of working with real estate agents and brokers is the fact that they typically have exclusive access to off-market deals, giving you access to unique opportunities that may not be publicly advertised.

Working closely with these professionals can give you a competitive edge in your search for the perfect apartment building investment.

Networking and Word of Mouth

Just like reaching out to real estate professionals, networking within the real estate community can open up unique investment opportunities. Both networking and word of mouth can be valuable resources when searching for apartment buildings for sale. This is why cultivating a vast real estate investment network is one of the best strategies for investors. [4]

Aside from networking with agents and brokers, investors can also attend industry events such as real estate networking mixers or seminars to discover potential opportunities. By actively engaging and staying connected within the real estate community, you can increase your chances of learning about off-market deals and emerging investment opportunities before they hit the market.

There is also no need to limit your network to multifamily real estate professionals. Leveraging your personal and professional connections can uncover hidden gems in the real estate market. Letting friends, family, colleagues, and acquaintances know that you’re in the market for apartment buildings can lead to countless referrals and introductions to property owners.

Savvy real estate investors can build and maintain these beneficial partnerships in order to find opportunities that are not available to everyone. [4]

Auctions and Foreclosures

Auctions and foreclosure sales represent another avenue for finding apartment communities at discounted prices. While these properties may require some level of renovation or rehabilitation, they can offer significant upside potential for savvy investors who are willing to take on the challenge.

Investors may find these opportunities through foreclosure auctions conducted by banks or government agencies. These auctions typically occur when property owners fail to make mortgage payments, leading to foreclosure proceedings. The foreclosed properties are then auctioned off to the highest bidder, often at prices below market value. [4]

There are also auctions that are organized by auction houses, real estate companies, or even online platforms. Investors can find a variety of apartment buildings up for auction, ranging from small multi-unit properties to larger complexes.

While auctions can offer the chance to secure a property at a competitive price, it’s essential to conduct thorough due diligence beforehand. This includes researching the property’s condition, title status, and any outstanding liens or encumbrances to ensure a sound investment.

Buyers should also be prepared to act quickly and have financing in place since auctions often require immediate payment or a significant deposit. [4]

By diligently searching through auctions and foreclosure listings, investors can uncover potential opportunities to add apartment communities to their real estate portfolios.

What to Look for in a Real Estate Investment Property

When purchasing a real estate investment property, investors should not just jump at the first opportunity they find. Instead, they should conduct their due diligence to mitigate risks and maximize their returns.

Thorough due diligence involves examining the property’s physical condition, legal status, location, and financial performance. By assessing these factors, investors can identify potential issues like structural defects and zoning restrictions. These things could adversely affect the investment property’s value and income-generating potential.

Conducting due diligence also allows investors to negotiate better deals and make informed investment decisions. Here are some of the key factors to look for when considering an apartment investment property:

Location: Location is crucial for any real estate investment. Look for areas with low crime rates, good schools, amenities (such as parks, shopping centers, restaurants), and access to public transportation. Proximity to job centers and universities can also be beneficial as it can attract more renters. [5]

Market Demand: Research the rental market in the area to gauge demand for apartments. Look for areas with low vacancy rates and increasing rents. Understanding the demographics of the area can help determine the type of tenants you’re most likely to attract.

Property Condition: Assess the condition of the building, including the exterior, interior, and common areas. Consider hiring a professional inspector to identify any structural issues or potential maintenance problems.

Income Potential: Analyze the current and potential rental income of the property. Consider factors like market rents, occupancy rates, and any potential for rent increases. Look for properties with positive cash flow and potential for appreciation over time.

Tenant Quality: Look for properties with reliable tenants and low turnover rates. Consider screening procedures for new tenants to ensure they meet your criteria. Problematic tenants can significantly impact your cash flow by not paying rent on time or damaging your property. [5]

Expenses: Estimate the operating expenses associated with the property, including property taxes, insurance, maintenance, utilities, and property management fees. Make sure the rental income covers these expenses and provides a sufficient return on investment.

Property Management: Consider whether you’ll manage the property yourself or hire a professional property management company. Factor in the cost of property management services and ensure they align with your investment goals.

Future Development: Research any planned developments or infrastructure projects in the area that could impact property values and rental demand. Growth and development can be positive indicators for long-term appreciation. [5]

Best Alternative for Accredited Investors: Multifamily Syndication

Investing in an apartment community of your own comes with several benefits like diversification, appreciation, and attractive returns. However, it also takes a lot of work in order to make it profitable. While it can be a good source of passive income, it is not a completely passive investment.

Being a landlord will take up a lot of your time and energy, unless you hire a professional property manager. It also comes with a lot of headaches like emergency repairs, rent collection, regular maintenance, and tenant concerns.

The good news for accredited investors is that there is an alternative way to invest in a multifamily property and enjoy its benefits without these usual headaches.

Real estate syndication allows multiple investors to pool their financial resources together to purchase a single real estate property. This can be done with any type of real estate. When it is done with a multifamily property such as an apartment community, it is called multifamily syndication. [6]

Multifamily syndication is the most popular version because of the strong and consistent cash flow generated by multiple units. These larger real estate properties are also riskier and more difficult to acquire for a lone investor due to how expensive they usually are. But through syndication, they become a lot more accessible.

Investors in a syndication deal do not have to worry about the entire property. They only have to provide a share of the capital needed to acquire it. As limited partners (LPs) in the syndication, they have limited liabilities and responsibilities. Aside from providing their share of the capital and paying certain fees, accredited investors don’t have to do anything else to run the apartment community. [6]

It is the syndicator or sponsor who takes on most of the responsibilities in the syndication deal. They serve as the general partner (GP) and handle everything, including creating and executing the business plan.

The syndicator is the one to locate the investment property, do their due diligence, secure the loan, and look for accredited investors who will participate in the syndication. [6]

In return for their investment, LPs earn a share of the property’s monthly cash flow. Depending on the deal structure, they may also earn a share of the equity upon resale. However, every deal is different, so investors should still review the profit split before participating in a syndication. Due diligence is still necessary.

Accredited investors in a syndication deal should be comfortable with a bit of illiquidity because these syndication deals tend to last for several years. But most real estate investments are illiquid and are still considered generally safe.

While no investment is without risk, multifamily syndication is one of the safer investments in real estate because of the fact that multiple investors are involved. It is a lot safer than buying a large multifamily property on your own. [6]

Real estate syndication is a true passive investment because the syndicator also handles property management on top of all their responsibilities. The investors do not have to worry about the property’s daily operations. The syndicator will either hire a third party property management company or handle it themselves.

This saves a lot of time for accredited investors, allowing them to focus on their other priorities.

Keep in mind that most of these syndication deals are exclusive to accredited investors, meaning those who fit the financial and professional criteria set by the US Securities and Exchange Commission (SEC).

Work With BAM Capital for the Best Multifamily Real Estate Syndication Deals

There are many ways to find apartment buildings for sale if you are interested in adding it to your investment portfolio. However, if you want a passive investment in real estate and you are an accredited investor, multifamily syndication is an even better option.

The only thing you need to do is make sure you are working with a trustworthy syndicator. Since the syndicator will be making all the decisions in the syndication deal, it’s good to work with a syndicator with a track record for excellence. Learn how BAM Capital creates Positive Leverage for their accredited investors. 

This Indianapolis-based syndicator is known for being a leader in their industry thanks to their award-winning strategy that mitigates investor risk while creating forced appreciation. [7]

Accredited investors love working with BAM Capital because they focus on Class A, A-, and B++ multifamily properties with in-place cash flow and proven upside potential. In fact, BAM Capital now has over $700 million AUM and 5,000+ units. [7]

BAM Capital is also a vertically-integrated company. This allows them to guide investors through every step of the syndication process, from acquiring high quality multifamily properties to renovating and managing them. [7]

No investment is without risk. Make sure to consult your investment advisor or speak to a BAM Capital investment team member before making any financial decisions.

For accredited investors who want to enjoy the passive income and all the other benefits of being in a multifamily syndication, schedule a call with BAM Capital and invest today.

Sources:

[1]: https://www.rocketmortgage.com/learn/benefits-of-real-estate-investing

[2]: https://blog.thebrokerlist.com/the-sites-you-should-use-to-find-apartment-buildings-for-sale/

[3]:https://www.indeed.com/career-advice/finding-a-job/pros-and-cons-of-being-a-real-estate-agent

[4]: https://www.fortunebuilders.com/build-a-real-estate-network/

[5]: https://www.investopedia.com/articles/mortgages-real-estate/08/buy-rental-property.asp

[6]: https://multifamilyrefinance.com/apartment-investing-blog/multifamily-syndication#important

[7]: https://capital.thebamcompanies.com/