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Okay, what's up everybody welcome to the video so in this video it's a little bit of an interesting one.

A few months ago, Matt and I and a big group of people went and we toured an apartment complex that we were looking to acquire, didn't do a whole lot of I guess talking during this video, but we did a walkthrough of it and so, as you guys are watching this video we're gonna be explaining the video.

So, let's dive in okay, the great apartment complex in Round Rock that we're looking to acquire it's over 20 units, I think it's 24 units total and so right now we're going to walk through so we're walking through every single unit in the complex to see kind of what shape they're in what we'll need to do to add value to this so I'm here with that and then a bunch of people through professionals that we could potentially go in on this with and we need their professional advice.

So we'll see you guys inside so who all I guess who all showed up to that yeah.

So that was the team that we put together for the due diligence and that consisted of contractors, insurance agent and then a couple of my buddies at our investors, and so I brought them along to give you some notes where they thought we could add value and try to be creative insurance to kind of understand the condition of the property and see what the quote would be on actually, insurance for the property rent and then maintenance to get bids on replacement costs and what we might need to do inside of each unit time.

Okay, cool and have you find this puppy in the first place? I found it from a broker? Okay, it was a it's interesting cuz, it's not like listed on MLS, but I was just reaching out to different brokers for last couple months.

It eventually somebody called me and said they had a deal that they thought might be a fit for what I was looking for and then kind of just analyzed it for six or seven months, really and then came back around and got it to a price that I wanted it to be so I'd put under contract, and then we had 30 days to do diligence, which is what we're doing in this video uh-huh.

Do bigger commercial, I! Guess it's! You know, it's consider commercial, even though it's a you know an apartment complex.

Is it six or seven months? Is that usually standards for like a deal to to work itself out? You know all over the place ever deals differently.

Yeah yeah, I would say, probably not in Austin, usually have to go quicker, but I would say that it usually takes about six months to actually get a deal done.

Okay, yeah friction from first time you see it's actually closing it right, yeah and then you said 30 days for due diligence.

Is that standard? Yes, anywhere from 30 to 60 days, I'll go do diligence and then you'll do like 30 or 60 days to close okay, so typically you'll get about 120 days total from the day you sign it to close it yeah, okay, cool! Well, let's just first point out how your hair is just oh yeah, yeah, that's awesome all right, so this was just one big building.

There's there's two stories: yeah 2040 units at that correct 24 units and that's the property manager, and so that's a big part of this is we've got to go and pretty much look at every single unit and obviously there's people living in a lot of these try to be efficient.

But at the same time you try to get pretty thorough notes right because you don't want to have to do it again for sure yeah so also like walking in on.

You know, people that obviously you're currently living here.

That's just you know we're trying to be quick, but also- and you said like make sure we're actually looking at everything, yeah and respect their time and right, I've done this before.

Where you you can't get into some of the units and that's kind of frustrating, because you set this up, and you get all these people out there.

You really want, to see everything and so having.

A good, property manager is actually really important, something that's like we're getting in, and you have to be kind of aggressive, sometimes yeah first time so it was good.

We got in every single unit yeah, and this was in this apartments in Round Rock, and would it be considered a B class or C class? It probably a c-plus yeah yeah, okay, yeah I mean I, don't know if I mean there are some records, maybe rougher parts around Rock but I think anything in Round Rock cake isn't as bad as like yeah.

Well, some people would imagine.

Yeah it's more.

So I think there's like you.

Can you can rank tenants and the property and it's more so kind of based on the age.

There's a little bit older.

Yeah, then it's not a beer.

A right! You know it's brand-new.

B's! I'd! Say probably 1990s yeah this was I! Think in the 70s? Oh wow.

Yeah well, I, look great for the second yeah.

They did a lot of renovations on the outside yeah we're going through these units to see what kind are you, but they can't run me so we're going through these units to see what kind of renovations are going to make, because potentially we want to add that so that we could increase the rents to create more income from these units right now, they're anywhere from eight fifty nine thousand and we'd like to get them up to a thousand.

You know a thousand fifty turn out all right now we're seeing what all around to put into that no to make that happen, and if it's worth it, okay back to the tour.

Yes, we got a tour.

You know the property manager talks about it a bit.

You know a lot of the units were similar, but there was some differences between unity and like yeah, where they was there was like they had use made me different tile, anything that learn and man.

This is intense, going through all these units, taking a lot of notes, it's hard to keep it organized, but you got to go slow and luckily it's only 24 units, 200 I'm screwed, it's true I've done out of 200 and you gotta have us get software just subtract all this yeah.

You can't just probably like 200.

You probably can't just take like no time I pad like right right, exactly yeah, this guy's, the night sky for the property.

So it's nice because he knows a lot more about it than we do right yeah.

He was everybody's best friend, oh yeah, quite the show.

So Kyle was saying that you would probably wait to do a make ready on this, because you have other vaping units or would you get started on this like now so I'm, just gonna strip? From my perspective, I have six basically like 60 days, I'm wondering if how many behind this.

So this is going to be Lee and that just depends on how quickly so cabinets are being delivered.

Tuesdays and so we're gonna have some general contractors come in, and so it may be a week or two he's got it on his radar that they're coming for them in a vacant unit.

Actually one of the next we'll get into you'll see a bunch of supplies in there that are gonna, go towards some of the make gratings so you're asking like with the make running process on the baking units like what, basically, what are you gonna buy like? Is it gonna be ready before that 60-day due diligence period is up or not yeah see if they're actively marketing it right? Because if you, it means you, because you had agreed on a price right and then it would be better if those had gotten filled up between now and then right, yeah I mean there's all different ways to look at it, because you kind of want to come and put your game plan in play and get your type of tennis in your chair, but also the income being as high as it can is helpful right.

You have to balance those two out yeah for sure.

What did you think about the property itself? I love it man, yeah I, love the location.

They did a lot of work on the outside yeah new, paying the roof half of new a sees that numbers were not as good as we thought, because it was ended up being six vacant units.

We thought there was three mm-hmm, no something had to work through yeah, it was clean - yeah, yeah I mean I've, seen some properties.

If there's trash everywhere, it was compelling pick up and doesn't like either the tenants were great or they had a good system in place.

Where um did that mean? It's got live on-site? No, he didn't oh well, then, and it was whatever they had going on with yeah.

It's good yeah seemed like good and working-class tenants right.

Most people were at work.

You know when we did this to her think it was like 9 o'clock or 8 o'clock, so I'm like in the morning.

That's right yeah.

So this property in Austin, like Central Austin, would be like rough because it was in Round.

Rock, like at least I mean I, don't know yeah.

That good haven't even approached the price to know for sure, but this would definitely probably be on the leader in inspector this one.

That's it yeah.

We had a bigger crew than most people, yeah, there's about there 10 or 12 people on there yeah and then we you ended up not acquiring yeah, we're you wholesale bit: okay, cool yeah, it's the first time I ever assigned a contract and yeah I thought about that before I, put it under contract and left that open as an option he's not put time key real estate and or a sign says, the buyer.

Okay home found a local group that syndicated it and they actually closed on it and I.

Think it's going well, that's awesome! Yeah! So did you not want to acquire it for any particular reason or did it? What was the I guess? They're just kind of weighing like different options that I had at the time of other deals, I had and then the opportunity to to wholesale it in to make some money sure by putting no money into it.

So it was pretty good.

It was a lucrative deal yeah and was able to still we value for the next buyer.

But yeah I mean my intentions at the very beginning: we're definitely to buy it then I started thinking about it and I was like man if I do buy this I'll probably use up most of my cash.

Okay, probably take me 2 to 3 years to start getting a decent amount of that back right and then you know I'm gonna do a guy something like well I'm, not gonna.

Have any other deals to do for a while sure making the quick cash on the assignment to then go maybe find this again and use that money to buy it and really have none of my own or old capital, but new capital invested would be price yeah or go just find 10 new single-family homes, so it was just kind of weighing all the options and I felt like that was the best decision for this deal.

Yeah for sure.

That's awesome, cool, um! Well, anything else on our apartment like that.

Well, I think it's just you know happy to help any way.

I can but I keep it pretty simple.

When I'm analyzing them I put a value that I think is on the property and I try to buy it below that value right.

That's what allowed me to have the opportunity to assign it sure and then typically an apartment, complex is run from 42 to 50% expenses.

So you can take the rent.

You know back out, 50%, that's what your expenses are going to be.

If you're managing it efficiently, then you can run your debt numbers to see.

How much are you gonna? Have the bank every month and see? What's what's the spread on the cash flow and right- whatever alright? And if that lines up, you feel comfortable and like the property, then I'm like hey, do the deal right, yeah, okay, cool all right! Well, if you guys have any questions, comments or concerns comment them down below, let us know we're having to make a whole video about a certain topic or just reply in the comments.

Thank you guys so much for watching, learn to like comment subscribe and share this with your friends.

We appreciate you guys: okay, thanks guys, yeah.


Is it profitable to buy an apartment complex? ›

Investing in an apartment complex is one of the most time-tested ways to build wealth. In fact, multifamily investing has an incredible array of benefits, including cash flow, the ability to finance properties with a limited amount of money down, and incredible tax benefits — just to name a few.

How is an apartment complex valued? ›

Three of the methods – gross rent multiplier, capitalization rate, and comparative sales – can be effective ways to calculate the value of an apartment building. However, each method has its own advantages and disadvantages. As a result, it's important to understand all three methods before choosing which one to use.

How to make money living in an apartment complex? ›

Rental income is the primary way that an apartment building makes money. The rents collected become the biggest chunk of the gross income for that month. Then, the mortgage and expenses are paid, leaving the net operating income, or NOI. In other words, the NOI is your monthly profit.

How to determine if an apartment building is a good investment? ›

The most common way to value an apartment complex is through the income approach. This approach divides the net operating income (or NOI) by the cap rate. Cap rate = most apartment buildings can expect a cap rate between 4 - 10%.

What is the average profit margin for an apartment complex? ›

Over the past 10 years of operating results, the average profit margin is as follows: Retail (28.7%) Apartment (23.7%)c.

Is it financially smart to buy an apartment? ›

If you're hesitant in spending a large amount of money for your first investment, buying an apartment can be an excellent option for you. Apartments are usually cheaper than other types of investments, making it an affordable entry point for investors who have limited financial resources or are neophytes in investing.

Do apartment buildings appreciate in value? ›

Multifamily rental properties provide excellent appreciation in value that meet and exceed other investment types. As such, apartment complexes increase in value as the net operating income of the property improves through rent increase and more effective management of the asset.

How can I increase the value of my apartment building? ›

Ways to Increase the Value of Your Apartment Complex
  1. Make Internal Renovations. ...
  2. Improve the Parking Situation. ...
  3. Install Washers and Dryers. ...
  4. Offer Storage Units. ...
  5. Install Technology Amenities. ...
  6. Offer Pet Amenities. ...
  7. Improve Internal and External Lighting. ...
  8. Add Vending Machines.
Jan 6, 2023

What is the cost approach of apartment building? ›

The cost approach is a real estate valuation method that estimates the price a buyer should pay for a piece of property is equal the cost to build an equivalent building. In the cost approach, the property's value is equal to the cost of land, plus total costs of construction, less depreciation.

How to make money with an empty building? ›

So, let's go over how to how to make money with an empty building.
  1. Big List of Warehouse Business Ideas – Make Money with Your Space. ...
  2. 1- Convert Warehouse to Office Space. ...
  3. 2- Rent Out an Event & Entertainment Center. ...
  4. 3- Provide Parking Spots. ...
  5. 4- Lease Warehouse Space. ...
  6. 5- Open a party venue. ...
  7. 6-Begin a film set rental business.

How do I financially prepare for an apartment? ›

Financial To-Do List for Renting an Apartment
  1. Budget for application fees.
  2. Check your credit.
  3. Determine if you need a cosigner.
  4. Prepare for move-in expenses.
  5. Update your budget.
  6. Pad your emergency fund.
  7. Look at your financial big picture.
Aug 21, 2022

What questions to ask when buying an apartment complex? ›

Questions to ask when buying a house or apartment
  • Can you please share with me a list of comparable sales over the last 3 months? ...
  • Why is the vendor selling the property? ...
  • Are there any known issues with the property, land or neighbours that they are aware of? ...
  • Have they received any offers and if so, how much?
Oct 12, 2021

Where is the best place to buy an apartment building? ›

According to Multifamily. loans, the 6 best cities to invest in apartment buildings in 2019 are Minneapolis-St. Paul, San Diego, CA, Orlando, FL, Knoxville, TN, Tampa-St. Petersburg, FL, and Phoenix, AZ.

What is cap rate for rental property? ›

Cap rate (short for capitalization rate) is the ratio of your net operating income to the purchase price of a rental property. In short, it's the rate of return on a real estate investment, like a vacation home or an Airbnb investment property.

What is a good rent profit? ›

The amount will depend on your specific situation, but a good rule of thumb is to aim for at least 10% profit after all expenses and taxes. While 10% is a good target, you may be able to make more depending on the property and the rental market.

Does profit margin include rent? ›

Operating profit margin is similar to gross margin in that it measures revenue against cost of goods sold. However, operating margin also incorporates fixed costs of running your business that aren't directly related to making your products. This includes rent, office supplies, and other administrative costs.

What is a good profit for rental property? ›

What is a good profit margin for rental property? A good profit margin for rental property is typically greater than 10% but between 5 and 10% can be a good ROI on rental property to start with.

How much money should you have before buying an apartment? ›

Make sure you budget for on-going expenses

You also likely have other expenses such as debt payments, car payments, school, and more. Be sure you have enough money for these plus any savings goals. The minimum of $8,000+ saved up is based on our example of an apartment at about $1,500/month.

Is investing in apartments risky? ›

Real estate investing can be lucrative, but it's important to understand the risks. Key risks include bad locations, negative cash flows, high vacancies, and problem tenants. Other risks to consider are the lack of liquidity, hidden structural problems, and the unpredictable nature of the real estate market.

How much should I save for my own apartment? ›

Now, the big question: How much money do I actually need to set aside for an apartment? Based on the above categories, you should save an amount equal to at least 3-4 months' rent. That will cover paying rent for the first month, security deposits and last month's rent.

How to start investing in apartments? ›

6 Ways to Start Investing in Apartment Buildings
  1. Do Your Own Due Diligence and Real Estate Investing. If you invest on your own, you get to keep all of the profits. ...
  2. Team Up with a Partner. ...
  3. Invest through a Syndication Arrangement. ...
  4. Invest through a Real Estate Fund. ...
  5. Invest through a REIT. ...
  6. Crowdsourced Investing.
May 17, 2023

Who owns the most rental properties? ›

Of the approximately 50 million rental housing units in the United States, around 41% of the rental units are owned by mom and pop landlords, also known as individual investor landlords.

Do buildings appreciate or depreciate? ›

In fact, homes are in constant states of depreciation unless they are regularly maintained or undergoing renovations to increase the home's value. Appreciation rates can also fluctuate significantly due to changes in the housing market, so the current rate of appreciation isn't always a reflection of future value.

What improves property value the most? ›

8 ways to increase the value of your home
  • Clean and declutter. ...
  • Add usable square footage. ...
  • Make your home more energy-efficient. ...
  • Spruce it up with fresh paint. ...
  • Work on your curb appeal. ...
  • Upgrade your exterior doors. ...
  • Give your kitchen an updated look. ...
  • Stage your home.
Jul 5, 2022

What is upside in rent? ›

The potential for rental income growth, or “upside,” also plays a significant role in the decision-making process. When a buyer or multifamily investor perceives substantial upside potential in a property's rental income, they may be willing to accept a lower cap rate at the time of purchase.

What could increase the value of the property? ›

Supply and demand. The basic law of supply and demand have a major effect on the housing market. Simply put, as the housing supply decreases or as demand rises, creating an inventory shortage, home values go up. A real estate inventory shortage means that there are fewer sellers than there are buyers.

How much does it cost to build an apartment complex in Texas? ›

Cost Per Unit to Build an Apartment Complex

It ranges from $4,700,000 and goes up to $52,000,000. This estimates building a single unit in an apartment complex at $70,000 to $200,000 per unit.

What is the most cost effective building? ›

Ranch homes are the most popular home style in the U.S. They're another rectangular-shaped house, though they come in “T” or “L” shapes, too. A home with a simple and concise layout is the cheapest type of house to build. Ranch homes are typically single-story structures with attached garages.

What is the average size of an apartment? ›

The average size of an apartment in the United States is 882 square feet, but the US is a big country, so it's no surprise that the average apartment size would fluctuate from state to state. However, you may be surprised to see which states tend to have the largest apartments versus those with the smallest.

How can the owner of a building make money? ›

The most common way to make money in real estate is through appreciation—an increase in the property's value that is realized when you sell. Location, development, and improvements are the primary ways that residential and commercial real estate can appreciate in value.

How can I make money from my property without owning it? ›

Subleasing. “A more creative way to actually invest in real estate without actually owning property is to lease a property with a one- to two-year lease and then subsequently sublease the property for use as a short-term rental or STR,” Hager said.

Is $10 000 enough to move out? ›

Share: You should generally save between $6,000 and $12,000 before moving out. You'll need this money to find a place to live inside, purchase furniture, cover moving expenses, and pay other bills. You'll also want to have enough money saved up for an emergency fund before moving out.

How much is a security deposit? ›

The average security deposit cost for a home is typically equal to the rent amount for one month. In many cases, you will be required to pay the first month's rent and the security deposit at move-in, so budget accordingly. Four key factors help determine how much a security deposit costs: State law.

What is the 50 30 20 rule? ›

One of the most common types of percentage-based budgets is the 50/30/20 rule. The idea is to divide your income into three categories, spending 50% on needs, 30% on wants, and 20% on savings. Learn more about the 50/30/20 budget rule and if it's right for you.

What do I need to buy to live on my own? ›

First Time Living Alone Checklist
  1. Mattress, bedding and pillows. The first thing worth your investment or time to get is a bed. ...
  2. First Aid Kit. ...
  3. Tool Kit. ...
  4. Toilet Paper. ...
  5. Cleaning Supplies. ...
  6. Kitchen Utensils. ...
  7. Clothing Hangers. ...
  8. Batteries and extension Cords.
Jul 17, 2020

How hard is it to live on your own? ›

Living on your own, especially if you don't have a roommate, can feel really great and freeing, but it can also be overwhelming and lonely, particularly when you first move in. Know that it's OK to feel overwhelmed or even scared. You will adjust, even if it takes a little while.

How can I live on my own financially? ›

1. Save money by cooking at home
  1. Get creative with your living space and furniture arrangements. ...
  2. Find a roommate that has the same schedule as you or the one who does not mind living with you. ...
  3. Use Sites like Spareroom to Find Roommates. ...
  4. Don't Buy Things that You Can Live Without.

Are rental properties actually profitable? ›

While rental property offers the potential for generating profits through recurring income, appreciation in property value, and tax benefits, there are also some risk factors to consider as well. For example, the heating and air conditioning system could break down and require an expensive repair.

How to make money investing in apartments? ›

6 Ways to Invest in Apartment Buildings
  1. Buy It Yourself. The first and perhaps most obvious method is to simply buy the building yourself. ...
  2. Buy It With a Partner (or Partners) ...
  3. Invest In a Syndication. ...
  4. Invest in a Real Estate Fund. ...
  5. Invest in a REIT. ...
  6. Raise Money and Create Your Own Syndication.
Jan 7, 2020

Is it smarter to rent or buy an apartment? ›

Buying a house gives you ownership, privacy and home equity, but the expensive repairs, taxes, interest and insurance can really get you. Renting a home or apartment is lower maintenance and gives you more flexibility to move. But you may have to deal with rent increases, loud neighbors or a grumpy landlord.

How much monthly profit should you make on a rental property? ›

The amount will depend on your specific situation, but a good rule of thumb is to aim for at least 10% profit after all expenses and taxes. While 10% is a good target, you may be able to make more depending on the property and the rental market.

How long does it take to make a profit on a rental property? ›

Most of the time, you can get positive cash flow right from day one with your rental. Figuring out your profit for the year is a matter of taking how much rent comes in and subtract how much money goes out for expenses like taxes, insurance, and mortgage payments. What you're left with is your profit for the year.

How many rental properties will make you a millionaire? ›

To become a real estate millionaire, you may have to own at least ten properties. If this is your goal, you need to accumulate rental properties with a total value of at least a million.

What rental properties are most profitable? ›

High-Tenant Properties – Typically, properties with a high number of tenants will give the best return on investment. These properties include RVs, self-storage, apartment complexes, and office spaces.

How to become a millionaire with rental property? ›

Here are some tips on how you can become a millionaire real estate investor.
  1. #1: Learn About Real Estate Investing. ...
  2. #2: Set Clear Goals and Have a Plan. ...
  3. #3: Stop Waiting to Get Started. ...
  4. #4: Make Offers with Terms You Can Afford. ...
  5. #5: Generate Cash Flow. ...
  6. #6: Grow Your Portfolio. ...
  7. #7: Work Up to Larger Properties. ...
  8. #8: Keep Growing.
Jan 24, 2022

Which floor of apartment is best? ›

For most people, the best floor to live in an apartment building is the top floor as it is more private, gets more light, and has better views. However, some people might prefer to live on a middle floor or lower floor, depending on their personal preferences and needs.

What is the point of buying an apartment? ›

You can fulfill the American dream of homeownership by owning an apartment just as you can with a traditional single-tenant home. Owning instead of renting can also be good for your finances, as you're building equity in a property you can later sell instead of throwing money away to a landlord.

What is the main reason to avoid renting to own? ›

A major disadvantage of renting to own is that renters lose their down payment and other non-refundable charges if they decide not to purchase the home. Some sellers may even take advantage of renters by making it difficult or unappealing to purchase the home — with the goal of keeping the down payment.

Why buying an apartment is better than renting? ›

Buying an Apartment

When you own a property, it gives you a sense of security and stability. You can do whatever you want with the apartment; there are no lease agreements, no hassle of rents, and no disturbance of a roommate.

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