Are Apartments Buildings a Safe Investment?

After the 2008 recession…people were scared to get into real estate again and many people I knew said real estate is dead and the USA is doomed and it will never recover…

Those same people today are saying stay away from real estate, it’s too high and overpriced.

I might agree in some areas, like single family homes, doing fix and flip investing. In my humble opinion, this can be a risky strategy as some of my close friends can attest to…The learned the hard way back in 2008.

But how about people who were invested in apartment buildings back then? You may ask yourself, “How did they do in the 2008 recession”? You may be surprised, but many of them did just fine. In fact, if you look at statistics on foreclosures at that time and you will find that foreclosures in apartment buildings were very low back then compared to single family home.

This one reason why backs look so favorable on financing large apartment buildings…The see them as LOW RISK compared to single family home. In some case,  It can be easier to get financing on an apartment building that in is for single family home.

The secret is in the cash flow.…Cashflow will always be there…Even when people start to loose their homes if a big recession comes…They become renters…..Sure, rents might go up or down some but people still have to live somewhere. Think about it…It makes sense…As long as you bought it right and have it structured properly, an apartment building can be a very stable and safe investment over the long run.

Here is an article written in the San Francisco Chronicle on the subject…

“After the real estate bubble burst in 2006, investors became more cautious about purchasing real estate. The old perception that every piece of real estate was a gold mine was no longer the case. Conservative investors looking to enter the housing market as of 2012 must look at three asset types: houses, apartments and certain single-tenant net-leased properties. When purchased at the right price and in the right location, these three types of properties yield solid returns with little risk.”

We love to show people the power of investing in multifamily properties…You can even do it using your 401k funds….How much are you earning with your 401k account?

Give us a can if you have questions about how to get involved. 510-863-1447

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