How Much Do You Need To Buy An Apartment Complex

Some lenders may offer a lower loan-to-value LTV ratio to help reduce risk.

How much do you need to buy an apartment complex. This single cost-saving step saved us over 6000 per year. Apartment complexes tend to be significantly more costly than smaller multi-family properties. If you manage the building yourself you can reduce that expense.

An apartment complex is generally categorized as a residential property with five or more units. Generally youll need a minimum of 20 down to purchase an apartment building. In Los Angeles in 2012 FHA borrowers can borrow up to 934000 for a duplex 1129250 for a triplex and 1403400 for a fourplex.

7 Basic Steps to Finance an Apartment BuildingComplex 1. The cost will vary based on the age of the building and the type of property such as A B or C apartment complex. There are also however some additional complications.

So if youre applying for financing with a lender that offers a lower LTV you might need to prepare for more than a 20 down payment. Its amazing what happens to utility bills when tenants share in the responsibility. That means a borrower could put down as little as 51000 and buy a 14MM fouplex.

The total cost range per square foot to build an apartment building is between 85 and 400 a square foot with an average cost of 229 a square foot. We also placed a cap on the use of the tenants utility usage. Lets say for instance that you pay 1000 to rent but buying an apartment will cost 200000.

Pros of Investing in an Apartment Building. In this article I walk through exactly what it took and the steps along the way. Generally speaking you can expect between a 4-10 cap rate when you purchase an apartment.