1. You can outsource your property management to professionals. 

You don’t have to be bothered by tenants and toilets.  Even if you have smaller properties, you can hire property managers.  Leave the headaches to them and go on vacation!  The apartment property doesn’t own you; you own the property. 

2. You can buy with NONE of your own cash. 

You can raise private money to cover any cash requirements.  You will find that it’s easier to get financing on apartments and that the MORE you borrow the LESS they look at the borrower’s credit.  In some instances, they don’t even look at the borrower’s credit but at the borrower’s assets instead. 

3. Apartments are made to cash flow even with nothing down. 

This means that instead of there being one house with one roof generating only one source of income, you have one roof with possibly multiple apartments under it creating multiple income streams.  You have economy to scale. Apartments are designed to be income-producing properties. 

4. Better leverage of your time and effort. 

Think about it.  What would you rather do?  Look for ten houses or a ten-unit apartment building?  On the flip side, wouldn’t you rather sell a ten-unit apartment than sell ten houses? Of course!  You have more leverage of your time. 

5. The value of income properties is based on income. 

This is a function of Net Operating Income (NOI) and you can create value by raising the rents and cutting the expenses.  This is a very predictable process.  You can determine how much the property is worth based on how much you raise the rents. 

6. Less competition. 

There are less people out doing multifamily apartment deals than single family deals because they lack mindset and they lack specialized knowledge.  They have limited themselves by the mindset that says they must graduate from single-family homes to multifamily properties. 

7. There is less risk. 

With multiple tenants you have multiple revenue streams.  If you lose one client, it’s not the end of your business.  On the other hand, if you are relying on a house as your sole source of income and you lose that tenant, you are still pouring money into that house.  There is mitigated risk through multifamily apartments. 

8. Non-recourse financing. 

The more money you borrow, the easier it is to borrow.  When you get to loans of two million dollars and above, it becomes non-recourse financing which means the asset is the sole security for the loan.  No one is personally guaranteeing the loan. 

9. Condo conversion. 

This has been very big in some parts of the country such as Denver and Tampa.  As an example, you would take a fiveplex, convert it into condos, and then sell the individual units.  It is a different strategy because you’re putting all your cash forward and then pulling out.  It’s not a long-term hold strategy. 

10. The sub prime lender bust. 

With sub prime mortgage lenders falling out of the market, there are people cannot qualify for home loans.  These people have to live somewhere so the demand for rentals is skyrocketing. 

As you can see, the advantages to owning multifamily apartment properties are solid and sound.  With so many venues to consider when trying to find something to generate passive income for yourself, you just can’t overlook the tremendous value created by investing in multifamily properties. 

About the Author:
Think you need big cash and experience to do apartments? Well, Lance Edwards is living proof that you can start with multifamily apartrment investing – just like he did and using none of his own money. Utilizing the multifamily apartment strategies he now teaches and writes about, Lance retired from his job in July, 2005. For more information on how you can achieve financial freedom using other people’s money, visit http://www.ApartmentWealthMachine.com

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At the same time, you don’t want to do too little. I see this a lot. Investors try to cut corners saying, “I’m not going to paint that. I know it looks like 1970’s paneling but it’s okay.” Then people come in they look at it and they walk around. It’s okay, it’s clean. It’s all right. Then they go down the street to a fixed up property and rent it and never call you back. The other guy took off the old paneling, put some nice drywall up there, painted it fresh and clean and it looks modern. 

Who do you think they’re going to rent from? The other guy’s property is going to rent a month or two and early and yours is going to sit. Again, if your property sits an extra month, that’s $900–more costs. If it sits two months, that’s $1,800. That would more than offset the cost of paying for the additional drywall and paint. 

At that point, your property’s now ready to be a long-term rental. We’re going to talk about how to get your properties ready for rental. 

Determine Rent and Market Your Property 

We’re going to talk about how to determine rent, a very important element. Where do you go to get comps? How can you do things of that nature and figure out what should you ask for rent, particularly if you just bought the property and you’ve never done that before? 

Then we’re going to talk about how to rent your property. We’re going to go through a fair amount on this process that’s marketing. As many of you know, marketing is really one of my passions. I love to talk about it. I love to teach it. I certainly love to test it and figure out what works. 

As I said, we have about 15 to 20 properties at any one time, so we are constantly testing Craigslist ads and other websites that charge money. We test signs, we test working with the MLS system, the realtor system. We test all this stuff and try to work with what obviously works best, and we continue to refine that. 

You’re going to get that experience. We’re going to talk about where to advertise. What websites are absolutely critical and how to advertise properly on those websites. There are probably five or 10 that are absolutely critical, including your own. 

If you are serious about this you should have your own website and you should be advertising your properties there and trying to drive some traffic there and using that as a place that people can go see photos of your properties, maybe even do a little video. 

We are now moving into video instead of doing stills. We are doing three or four minute walkthroughs at a house and then walking outside and videotaping the neighborhood. We combine that with Google Maps. 

It’s absolutely amazing. People can know more about this house sitting at their computer than in the past. It’s just remarkable what they can do. 

About the Author:
Mike Lautensack is a full-time real estate entrepreneur, coach and mentor and creator of the Private Lending Presentation Kit.  To learn more go to http://www.learnrealestateinvestingblog.com. I invite you to learn more about real estate investing and join our FREE weekly teleseminar class by going to http://www.realestatewealthtoday.com/TuesdayTipsSignUp.html.

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Last Saturday the Wall Street Journal continued its evaluations of the 401(k) system with an article “Employers Begin Driving Your 401(k).”  Fortune magazine over the summer ran a feature on the demise and low value of the 401(k) and even called for the program to be scrapped. They make the very point we have been making since earlier this year.  Baby Boomers, Generation Xers and even current retirees need a better system to prepare for quality retirement. 

The 401(k) system and other qualified account systems are here to stay. But where the money is saved is still up for grabs, even though there is a move for employers to take more and more control.

The current 401(k) system is not working and yet 74% of workers keep contributing.  Now the move is for employers to have more control, and the move also is for a higher percentage of employees incomes to go into the 401(k) system.  Does this make sense?  Employees still will not really be aware, not because the information is not there, but because they generally simply accept what is given. This article indicates what we know if we are close to the people, that generally workers accept what is handed to them.  

A whopping $3.5 Trillion dollars of 401(k) money is in the market through one form or another.  To move money into an automated forex software robot system cannot be done by the companies because the system works differently. 

The problem as we see it is that the 401(K) system is not creating retirement for the individual workers.  It was not intended to do so.  First, they can never save enough for quality retirement.  Secondly, all the funds are related to the stock market in one form or another which is not  performing enough, especially after fees, commissions and so on, and thirdly, once Baby Boomers are required to start withdrawing the $3.5 Trillion dollars, the market decline will be further impacted in a negative way. 

We could go into detail here, but we have done so elsewhere and it takes a larger discussion than we have space for in a brief article. 

But there is a plan emerging that has the potential to create a quality retirement through IRA’s and 401k)’s.  The individual worker needs to become aware and take action independently if they want to take control. 

If you are like I was only a few years ago, you did not know what it meant to say something was a qualified plan. The terminology was not clear because we do not use it every day.  A qualified account is a technical, financial term which describes a savings fund as a fund in partnership with the government.  The government says you don’t have to pay taxes on that money right now.  You can postpone them until later.  If you pull the money out before age 59 1/2, you’ll pay a 10% penalty, in addition to your taxes.  If you don’t start pulling certain amounts out by the time you are 70 1/2, you’ll also pay huge fines. 

These plans are the IRS sections 401(k), the IRA, and Roth and the 403(b).  401(k) is the largest, $3.5 Trillion. Where is the money?  By-in-large, in the stock market through mutual funds.  Some in bonds.  Some in specialized or individualized plans.  But most in the easiest, the 401(k). 

Since the mid 1970’s when the plans were created, many amendments have been made to them, but they remain basically the same. 

The plans came into law in the mid 1970’s.  Here’s the catch.  They were designed to encourage savings plans.  Not retirement.  They were never designed to create enough money for retirement.  As pension plans began to disappear, as workers began to move around more from job to job and

career to career, pension plans all but disappeared.  The natural thing was for people to begin to think of their 401(k) as a pension plan, which is not how the 401(k) is set up at all. 

We’ve sat across the table from many ordinary couples and we find that few have over $100k or $200k saved up in 401(k) plans.  This is a mere pittance for help with retirement years. 

Here’s another catch.  If they have more, they will be paying more in taxes once they begin to withdraw. 

Here’s the option:  Knowing there is a penalty to withdraw funds before age 59 1/2, it is allowable in most cases to transfer money from the account into a self-regulated account.  There is help in this process, and no penalty or taxes.  A good forex automated trading system that does not try to over-reach will now make a modest 3% monthly, but that is far higher than the continual loss of money in the mutual fund system where the $3.5 Trillion sits now. Employers will be taking more control, and they may do a little better, but it is a trick to beat the index funds. 

Not everyone will move their money, so the impact will be nil.  But for those who investigate and move their 401(k) or other qualified plan into forex automated trading have the potential to create a quality retirement nest egg. 

A good automated forex software robot system requires no learning, no trading skills, and performs far better than the traditional market programs.  The S & P indicator was down 27% over the past decade.  The outlook for the next is no better.  The funds from workers going into 401(k) plans are not working.  But here is an automated forex software robot system that should be carefully considered as there are people doing very well and moving to a quality retirement. 

About the Author:
Dr. Terry C. Thomas is market representative for Easy Trade Forex Software, has written extensively, his new book You Feel Dumb, Broke and Stupid Without Money: How to Get Your Money Back and hosts a weekly radio show, Money, Wealth and Prosperity. http://www.EasyTradeForexSoftware.com

Property Classes are really set by the conditions of the property and where it is located. They are not set by the appraisers. The classes are not something that is formally defined but more of something that is set in the vernacular. 

Class A apartment properties, naturally, are the cream of the crop. These apartments are newer and have a higher rent than apartment buildings that are in the other classes. You can actually have a new Class A property in a Class B area. They are classified as Class A because they are new but they have lower rents than other Class A apartment properties because of their location.

 Class B properties are multifamily properties that are 10 – 15 years old, well-kept and are in the “middle class” part of town. 

Class C properties are in low to moderate income or blue collar neighborhoods. They range in age from 30-40 years so they have usually been through at least one rehab. The average rent for a one bedroom is $400 – $425. 

Class D properties are in very bad neighborhoods. These are in high crime neighborhoods; neighborhoods where you do not want to get out of your car. You generally do not want to work with Class D properties. 

If you are going to do Class D multifamily properties, you need to be in that niche. You are not going to turn around a Class D property without turning around the neighborhood that it is in. Class D properties are suffering from a neighborhood problem and not a property problem. 

Class D properties are bought only because they are cash flow machines. You will not get any appreciation on them. They require intense management and heavy security. 

Class C and lower Class B multifamily apartment properties are your bread and butter and they do not offer many amenities to tenants. The further you go down from Class A to Class D, the better your cash flow. The premium deal is finding a Class C property in a Class B area that you can reposition. 

If you could find a multifamily apartment property that is considered a Class D because of its condition but it is in a Class C neighborhood, you would have a great investment deal. In this case, you can come in and clean up the property by either making a physical change or a security change to it.  You can buy it low, make the changes that are needed and then sell it for a great profit. 

Your understanding of the multifamily property classes enables you to effectively assess the potential value a multifamily property has as an investment for you. You can then more easily decide if it is deal that you would like to pursue or not. 

About the Author:
Think you need big cash and experience to do apartments? Well, Lance Edwards is living proof that you can start with multifamily investing – just like he did and using none of his own money. Utilizing the multifamily apartment strategies he now teaches and writes about, Lance retired from his job in July, 2005. For more information on how you can achieve financial freedom using other people’s money, visit http://www.ApartmentWealthMachine.com.