Why Do Class A Or Class B Apartment Be Foreclosed
I am in presently in the mode to take my portfolio to the next level and in the market for large apartment complexes. To my surprise i discovered a good number of REO properties (always 30% to 40% occupied). I presently owned and managed 2 apartments with a total of 38 units. So when i do the numbers, i keep wondering what was the previous owners doing with the money, why do they allow foreclosure to happen, these are income producing properties. What can go wrong in a multi-family (40 + units) properties that could lead to foreclosure. I need to be educated. Thanks
I am not the owner but I have seen some complex like that. So many things can lead to bad reputation for the complex, resulting in difficulty in renting. They include bad tenants, crime, drug dealing, high competition, lack of enough advertisements, poor maintenances of exteriors and lawns, wrong selection of tenants, changing neighborhoods and so on.
You might check the neighborhood to see if there is enough demand. Some time back I found what appeared to be a good complex except they could never run it so it was close to fully occupied because there was a lot of competing rental inventory.
Another possibility is that the turnover costs were eating them alive. It might be interesting for you to contact some former owners and ask them what went wrong.
It is amazing how some old stuff get life againg one someone who is just seeing them for the first time responded to it. I lost the bid to some money bags who offered to buy the property cash as required by the seller. I put in a bid to be financed. I am not sad about that because it would have drained me completely if i bought the property.
It simply can be Bad property management, or the property manager was doing what the owner wanted, meaning, a Bad owner that skimmed the cashflow and let the property run down. Unfortunately, it happens all the time.
The quality of the property has nothing to do with the quality of the owner or property manager.
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It simply can be Bad property management, or the property manager was doing what the owner wanted, meaning, a Bad owner that skimmed the cashflow and let the property run down. Unfortunately, it happens all the time.
The quality of the property has nothing to do with the quality of the owner or property manager.
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I would consider using your equity in the home by getting a home equity line of credit. You only pull the money once you have located a property to pay cash or use for the down payment then refinance the new property and repay the home equity line which can be used again for the next property. If this is something you want to consider I can run a quote for you.
Good Luck,
Robert
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There are some good training programs today that can help you get started in the commercial business.
CSW,
Any recommendations for commercial training programs?