Have you ever thought of investing your money into some sort of asset but are unaware which direction you want to go? In my opinion Apartment buildings are the way to go!
Here are some numbers I got from a Apartment complex in Orlando, Florida.
There is an apartment building going for 6,300,000$
It has 140 units/45,000$ a piece.
The average price of living in Orlando is 700.00$ for apartments/little houses. So lets give each apartment unit a value of 650.00$ 2 be conservative.
650.00$ month * 140 units = 91000.00$ month.
year 1 910,000.00
year 2 1,820,000.00
Year 3 2,730,000.00
Year 4 3,640,000.00
Year 5 4,550,000.00
Year 6 5,460,000.00
Year 7 6,370,000.00
7 years 7 months to pay off that first loan with 10% interest. Assuming the apartments stay 100% at capacity and rent is going for 650.00$ for each unit.
Now I’m not sure how loans work with money like that. But if it was a 30 year fixed loan at 10% interest you would be paying around 17,500.00$ a month.
So 73,500.00$ would be your monthly profit.
After paying management/janitors/fixes etc…
I’d imagine you still would be making a ton of money.
You can’t get margins like that renting out a house.
Remember, your also building up value each month. Every time you pay off that loan assuming the value of your property stays the same its money you can get back if you decide to sell it.
On top of the monthly rent profits you made.
What is required to run an apartment building each month?
Management, Janitors possible security guard? Now how much would a good manage cost monthly?
4,000.00 month= management
Management 1,800.00$ assistant
1,600.00$ = janitor x2+1 security guard (4,200.00$)
1 manager Janitor (2,200.00$)
5,000.00$ in apartment maintenance supplies in which could be more or less.
Hell lets say 10,000.00$ for insurance /month.
2,000.00$ for advertising.
91,000.00$ – 46,700.00$ =
44,300$ Profit= month with 100% capacity.
Lets assume your only at 80% capacity.
80% of 91,000.00$ = 72,800.00$
Your still making 26,300.00$ profit a month after all expense’s if my numbers are correct which I just sort of estimated. But they are close.
This is with the whole complex being ran by other people with little supervision.
I’d recommend researching RE for sale. Check out the area. If any schools/hospitals etc… is being built in the immediate area it would be wise to grab that building because it would be a more desired area.
A senior citizen complex would be nice too being that they all have fixed income and you wouldn’t have many problems being they are all old and are just looking for some overhead.
Look into how you would obtain such a loan. That would be the your main obstacle.
If investors were handing out large amounts of money just like that I would be a millionaire already as would TONS of other people. Work on building your credit.
I also used exaggerated numbers in my first post to offset differences like you mention. Would you really have 10% interest on a 30 year loan for 6.3mil? Doubt it. You would be getting more then 650$ per apartment. The average was 700$ for your everyday apartments/small houses in Orlando which is where the numbers are coming from.
The numbers I got from that example are from a complex which is about 750$-800$ ea in which I know I did not mention. (sorry)