How Much Do You Need To Buy An Apartment Complex

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.

How much do you need to buy an apartment complex. Lenders wont give you money to buy an apartment complex unless you can show that it will be profitable. Deciding on your risk tolerance will dictate your apartment investment strategy. Work closely with an accountant to crunch numbers and create the necessary financial documents to show a lender.

Generally speaking you can expect between a 4-10 cap rate when you purchase an apartment. In Los Angeles in 2012 FHA borrowers can borrow up to 934000 for a duplex 1129250 for a triplex and 1403400 for a fourplex. Compare prices from apartment builders near you.

Pros of Investing in an Apartment Building. That means a borrower could put down as little as 51000 and buy a 14MM fouplex. We would pay for the first 100 and the tenant would be responsible for the remaining portion.

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. Apartment complexes tend to be significantly more costly than smaller multi-family properties. Upfront of course buying will seem pricier because youll have to cough up as much as 48000.

Generally youll need a minimum of 20 down to purchase an apartment building. If some of your units are vacant or tenants arent paying you still have. An apartment complex is generally categorized as a residential property with five or more units.

If you manage the building yourself you can reduce that expense. These pay for the survey appraisal. On the other hand a conventional lender will want 40000 down.