How one 28-unit apartment complex could be your road to building equity for retirement

by | Oct 1, 2015 | Article, Topics

How one 28-unit apartment building could be your road to building equity for retirement blog by Chris UrsoWhen leverage is used properly it’s your best friend in real estate.

Using the right financing for the right property allows you to create true wealth over time.

We help our private coaching clients establish a custom plan, identify the right properties and financing structure for each deal.

How one 28-unit apartment complex could be your road to building equity for retirement

I want to give you a quick example of how an investment of $200,000 in one property, one time, can create over $600,000 of equity for you and your family – while generating cash flow, of course.

This is a 28-unit building that was purchased by one of our clients – this is his second property in less than two years. He bought it for $600,000 and put down 25%. This property has a net income of $60,000 a year.

This is a 28-unit apartment building purchased by one of Chris Urso's clients.

This is a 28-unit apartment building purchased by one of Chris Urso’s clients.

Time to pay attention: His annual mortgage payments on a 15-year mortgage with a 5% interest rate are $42,000 a year leaving him with $15,000 to $18,000 a year of cash flow which is nice…but remember, we are focusing on building equity.

The rent collected is paying off his mortgage every year for the next 15 years. In addition to his cash flow this investor is accumulating $25,000 per year of principal (building equity).

Now here is the fun part: In just 15 YEARS, he will own the property free and clear.

So lets assume the property does not increase in value at all…on just this one property this investor will amass $600,000 of equity! …Oh yeah, and by then, the cash flow will be about $60,000 a year.

Please keep in mind before becoming our client this investor had absolutely no experience investing in apartments. Within two years he worked a plan (part time), acquired two buildings, and is on his way to amassing $1 million of equity and securing his family’s future.

I wanted to focus on this type of deal, because it’s one that I think every investor that is reading this can get their arms around. This not a 300-unit monster, it is a achievable piece of your portfolio puzzle that can be your starting point to truly creating a family legacy of assets.

When leverage is used properly it’s your best friend in real estate.

Using the right financing for the right property allows you to create true wealth over time. We help our private coaching clients establish a custom plan, identify the right properties and financing structure for each deal.

Many investors think banks aren’t lending or won’t lend to them, that they don’t have enough experience to get financing on an apartment building. This could not be more untrue!

Several of our clients had banks competing for their business – as first-time, out-of-state operators!

I tried to put everything that I wish I knew about buying apartments into this guide: The Smart Investors Guide to Buying An Apartment Building – click here to get your copy.

Get Chris’ Apartment Buying Guide

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