Ok. I want to build an apartment complex. How do I get money?

2 comments

1. 

   Matt on September 7, 2009 at 11:56 am

   this is odd because typically the SBA will not finance a real estate investment co. you talked to the SBA or the bank and they said this was acceptable? to build an apt complex from the ground up is gonna be $$$. have you considered buying existing apt complexes (crappy ones) and simply renovating them and renting them for a decent profit? that will give you some good experience with the business. there are several ways that you can finance this, none of them are easy. first, find a real nice person to cosign a loan for you. short and sweet, but not easy to find a generous person like that. if you own your home, you can put that up as collaterol for a loan. however, building an apt complex is going to be several million dollars easily, even in the cheapest areas of the country. this is why you rarely see small apt complexes. you have to do a good job of getting all your apts rented and have a lot of people in your complex in order to start making a profit within 5 years. this will be a near impossible task to accomplish anytime soon since you are kind of trying to start near the top. the typical way to do this is: 1, buy a house for $3,00-$5,000. preferably fix it up yourself and resell it for $100,000. repeat this with several more homes and you will soon have about $500,000 in your pocket in 3 years. of course after you sell your first home that you renovate you should be able to pay some people to do the next few for you, so you will start to spend more time scouting new properties and doing paperwork than the hard labor. after you got about $500,000 in the bank and have become successful renovating and selling houses and condos, now things become interesting. if you have a good credit score, $500,000, and experience in the business the banks will start to take you seriously…and investors will take you VERY seriously. the more of your personal money that you are willing to risk the more likely they will listen to you. anyone that is willing to put all their cash into a project is either extremely confident it will succeed or pure crazy. during the several years you are buying and renovating houses you should get incorporated and all that legal junk so your business becomes well-established in the community and has a good credit ratings. hire full-time employees and pay someone to do an evaluation of the area and tell you how likely it is a new apt complex will succeed. to make a profit quick (within 3 years) i’d say you are gonna need several buildings in the complex and an average of 300 occupied units. good luck

2. 

   billone44 on September 7, 2009 at 11:56 am

   Well not really there are no secrets, You will need a business plan a proposal a cash flow analysis good credit and be incorporated. After you have all this in place you then have to determine what rate of return your are willing to pay in order to find the right commercial lender. you may also want to consider selling stock to raise the funds it can be a daunting task to undertake. If you have not completed any of the above Write to bankerbobretired@yahoo.com and he can show you what needs to be done and what expenses are involved Good Luck