Here at Apartment Building Investments, we sell the smaller apartment buildings from two to thirty-five units.
We also help real estate agents that specialize in selling homes, figure out what a duplex to a multi-family property may sell for. If you are a real estate agent and you feel you need help with figuring out what a property may sell for, and you can see us helping you please contact us.
Sellers, Choosing the Right Multi-Family/Apartment Broker:
• We work with sellers needing to reinvest via 1031 exchange, or sell and move on. We walk you through the process, using simple language, so we both understand where we are going.
• We come up with a market analysis based on income, expenses, neighborhood and experience selling apartment buildings.
• Once you become our client, when you call us, your call goes directly to our cell phone. Try it now, 818-605-2626.
• To properly market your property, we will need as much information on the property that you have, like actual rents, expenses, so your buyer can make an informed decision.
• We have local contacts like: attorneys, inspectors, exchange companies, title companies and contractors, to see you through the closing, if you need them.
• We specialize exclusively in Apartment Buildings/Multi-Family properties from 5 to 25 units, along with 2 to 4 units. We are a niche office for properties in Pasadena, South Pasadena and Altadena.
• We will put the work in to find the right buyer for your property.
• We will figure out and show you what the property currently worth in today’s market and discretely present it to investors or market it to the world, depending on what you feel comfortable with.
• If you can see yourself having a productive relationship with us, where we deal with all the buyers and the escrow process, we would like to be your real estate broker.
• Call / Write Now!
Buyers, Choosing the Right Multi-Family/Apartment Broker:
- We work with first time investors. We walk you through the process, using simple language, so we both understand where we are going.
- We will focus for you, on the income, expenses and any items reflecting the value of the property. Not so much on the emotional aspect of real estate, as in the color of the walls etc.
- Once you become our client, when you call us, your call goes directly to our cell phone. Try it now, 818-605-2626.
- We will give you as much information on a property that we have, like sales comparables, actual rents, market rents, market price per unit, market price per square feet, market capitalization rates and market gross rent multipliers, so you can make an informed decision. See below for explanation of terms.
- We have local contacts like; property managers, lenders, attorneys, inspectors, exchange companies, title companies and contractors, to see you through the closing, if you need it.
- We specialize exclusively in Apartment Buildings, Multi-Family properties from 5 to 25 units, along with 2 to 4 units. We are a niche office for properties in Pasadena, South Pasadena and Altadena.
- We will put the work in to find your right investment, as a first time investor or seasoned investor.
- We will work to find the right property for you, from our pocket listing, expired listing and from real estate agents specializing in apartment buildings that we keep in contact with. Many of our sales are from properties that are currently not on the market.
- Can you see yourself having a productive relationship with us, where we all like and enjoy what we are doing? Call / Write Now!
Price Per Unit:
$500,000 apartment building, you have 10 units in it, would be a $50,000 price per unit.
Example: $500,000 /(divided by) 10 = $50,000 Per Unit
Price Per Square Footage:
10,000 square foot building sold for $1,000,000 would be $100 per square feet.
Example: $1,000,000 / (divided by) 10,000 = $100 Per Sq Ft
Net Operating Income (NOI):
Gross rental income minus expenses (Excluding mortgage payments and depreciation).
The higher the NOI, the higher the property value. The lower the NOI the lower the value.
Gross Income: $50,000
Minus Expenses: $25,000
Capitalization Rate (Cap Rate):
Cap Rate is Net Operating Income (NOI), (Excluding mortgage financing) divided by Sales Price.
Cap Rate is what your return on investment is if you paid cash.
A higher cap rate of 10% to 12% usually typifies a higher risk Apartment Building with a lower sales price, located in lower income neighborhoods.
A lower cap rate of 4% to 6% usually typifies a lower risk Apartment Building with a higher sales price, located in higher income neighborhoods
Net Operating Income $25,000 Divided by Sales Price $500,000
$25,000 / $500,000 = 5% Cap Rate
Return on Investment (ROI) or Cash on Cash Return:
Annual cash flow divided by down payment (money invested)
Calculates how fast the down payment (money invested) is coming back to investor.
Example: Cash Flow $10,000 Divided by Down Payment $100,000
$10,000/(divided by) $100,000 = 10% return (10 years to pay $100,000)
Debt Coverage Ratio (DCR):
The amount of cash flow available to pay the loan.
Lenders usually want to see a debt coverage ratio of at least 1.20% or higher.
If it comes up to 1.0, that means you have no excess cash flow, that means your NOI is equal to your mortgage. If it goes over one, that means you have cash flow.
Net Operating Income divided by your annual debt service (mortgage payments).
Example: Net Operating Income $35,000 Divided by Annual Debt Service $28,000
$35,000 / (divided by) $28,000 = 1.25%
Class A apartment buildings represents the newest and highest quality, the best location, highest rents. They attract the highest quality tenants.
Class B apartment buildings are usually older, good quality apartment buildings.
Class C apartment buildings are older buildings with subsidized section 8 tenants in them.
Class D apartment buildings need extensive renovation or are vacant buildings.
Need a manager for your units?
If you have 2 to 4 Units:
• We charge 5% of the monthly rent
If you have 4 to 25 Units:
• We charge 4% of the monthly rent