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Real Estate Purchasing real estate...questions...

Walley

New Contributor
Read Millionaire Fastlane
Oct 1, 2007
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I've never bought any type of real estate property. I am also in the service and I have a very good credit score. I'm interested in buying apartment complexes.

Can I just go to the bank and get a regular loan just like if I were to buy a house?

I was thinking about purchasing it outside of the state I live in because it's cheaper than my area. If I bought an apartment complex and have property managers manage it, do I get a monthly income or do they just send me everything at the end of the year?

How much does an average property manager charge anyways?

Can I get a VA loan for buying an apartment complex?

Thanks. I probably can just go to the bank and talk to them, but I'm still brainstorming.
 

ProInvestor

New Contributor
Aug 15, 2007
82
10
15
Australia
I would highly suggest you talk to this forum before stepping into a bank!

"Can I just go to the bank and get a regular loan just like if I were to buy a house? "
> Depends on size of complex, usually under four units/apartments the answer is yes, though it depends on the lender.

"do I get a monthly income or do they just send me everything at the end of the year?"
> I would tell the agent to send it to me monthly.

"How much does an average property manager charge anyways?"
> It depends, it all can come down to negotiation, however around 3%-7% (depends on level of expertise / complication involved).

"Can I get a VA loan for buying an apartment complex?"
> My guess for Multifamily would be no, though if you actually lived in the complex and rented rooms out (and it was not considered Multifamily) then yes.

Rgds.
ProInvestors
 

Walley

New Contributor
Read Millionaire Fastlane
Oct 1, 2007
130
1
24
Thanks for the reply. What is that 3-7% coming out of?
 

reipro

Contributor
Sep 27, 2007
156
42
36
49
Lincoln, NE
On the VA part. It depends in what part of the country you live in. A typical response to this question is "yes" if it is 5 units or less and you live in one of the units. If you are buying just to rent it out then no.
 

Runum

Platinum Contributor
Speedway Pass
FASTLANE INSIDER
Summit Attendee
Aug 8, 2007
5,968
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DFW
Thanks for the reply. What is that 3-7% coming out of?
It will come out of the gross rents collected.:cheers:

Greg
 

yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
2,233
489
192
41
Read about 5 books on apartment investing.

Volluci and Berges seem to be the most popular authors.
 

Walley

New Contributor
Read Millionaire Fastlane
Oct 1, 2007
130
1
24
Thanks for the replies.
 

yellowpad

PARKED
Oct 3, 2007
30
0
10
47
Orange County, CA
I've never bought any type of real estate property. I am also in the service and I have a very good credit score. I'm interested in buying apartment complexes.--Do your homeworks. Better yet, do a business plan.

Can I just go to the bank and get a regular loan just like if I were to buy a house? Most bank will tell you to sit and wait........and wait.....get with a qualify mortgage Broker and crunch out some numbers and go over with your plan. If he cares and value you as a client, he would take his time to see if your idea is sound.

I was thinking about purchasing it outside of the state I live in because it's cheaper than my area. If I bought an apartment complex and have property managers manage it, do I get a monthly income or do they just send me everything at the end of the year?--be very careful here. One, you're buying something that you don't see often. Two, how do you know you are buying an apartment complex? Dumb....but it happened. Typical property manager will forward the rent less their fees monthly. How much does an average property manager charge anyways?--some with a flat fee + a small percentage...5-10%. Some charge a flat fee..........

Can I get a VA loan for buying an apartment complex? maybe, but I hate dealing with the government. But if you don't intent to live in one of the apartment acting as the manager, I say NO 99.99999% of the time.

Thanks. I probably can just go to the bank and talk to them, but I'm still brainstorming.---besides brainstorming, read some books. Go to B&N :)
 

Bilgefisher

Bronze Contributor
Read Millionaire Fastlane
Aug 29, 2007
1,849
280
73
Aurora, Co
www.liveandflip.com
yellowpad,
Ive noticed you have mentioned more then once to go through a mortgage broker. What are the normal expenses involved with a broker? Why do you prefer going through them instead of dealing directly with the bank?
 

yellowpad

PARKED
Oct 3, 2007
30
0
10
47
Orange County, CA
Base on my experience, mortgage Broker as many lenders and program to pick from versus bank has very few programs. Local banking institution doesn't like to put their fund in one basket....they would turn it down merely on the fact that they run out of funds or the particular investment arena is a covered. I am working with a number of local banks now that turns away all the risky deals, and any deal over $2.5mil... Doing this allows them to maintain their top notch customer service....... If you prefer local bank, try it. You might like it....as every banking institution is different.
yellowpad,
Ive noticed you have mentioned more then once to go through a mortgage broker. What are the normal expenses involved with a broker? Why do you prefer going through them instead of dealing directly with the bank?
 

SteveO

Legendary Contributor
Speedway Pass
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Jul 24, 2007
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I prefer brokers as well. They tend to be more creative and know how to package a loan for presentation.
 

Adam

New Contributor
Aug 12, 2007
68
15
20
Minneapolis
Do they normally charge a percentage of the loan, or a flat fee?
Typically a percentage of the loan amount. We try to make 1% of the loan amount on deals $5M and less and on the large deals, we charge anywhere from an 1/8% to even a point or more depending on how much work it involves.

Having said that, we are a relationship based lender, meaning that we are looking for long term business from our investor clientele. There are many times that we significantly reduce fees for some transactions. There are a few clients that will do 10+ loans a year with us and they don't pay much per transaction.
 

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