I remember that feeling like it was yesterday. You know the one. The feeling that came over you when you decided to buy your first apartment building.
Even though it was a few years ago, it remains burned into my mind.
I had been investing for a few years already. I had tried a bunch of different things and decided, largely due to my day job, to pursue rental houses, and I had thrown myself into it and was building a nice portfolio of cash flowing rentals.
I took full advantage of the market as it was tanking, and steadily bought better and better properties. But as the market fell, I kept hearing that Fannie and Freddie were going to lower the number of conforming mortgages that an individual could have. So as I continued to buy, I set about trying to figure out what was going to be the next chapter in my real estate career.
I knew I didn’t have the time to do flips or work on wholesaling, so really the only thing left was commercial real estate. But if you know anything about my area of Southeast Michigan, you know that you didn’t want to be anywhere near industrial, office buildings, or retail properties, because the market for them was basically non-existent.
So that left apartment buildings.
But while I had gotten pretty good at buying and managing rental houses, I had no freaking clue about apartment buildings. And what I had heard about them was pretty scary.
You’ve heard the same things I’m sure. Like buildings turning into crack houses, like having to wear a bullet proof vest when you go collect the rent, like deadbeat tenants that trash property, and of course all of those lovely evictions.
And the crazy thing was that you got to experience all of these wonderful things by paying a million dollars.
All of that was, and quite frankly still is, enough to scare most people away from even thinking about buying an apartment building.
But if you know my story at all, you know that the only reason I was building a portfolio of cash flow properties was to build a safety net for my family because I worked in the automotive industry. And while the houses were cash flowing nicely, they were only a start to building a true safety net.
So I swallowed hard, and decided to jump into the deep end.
90 days later I had my first building under contract.
The day I made that decision it looked like I was going to climb Mt Everest to make it happen.
I look back now and can’t believe how simple it was. But little did I know, I really was jumping into the deep end!
