So what did I do next? How did I go about buying my first apartment building?
At first it was hell. I’d call the agent named in an ad and obtain some preliminary information on the building: address, projected rents, some of the projected expenses, and the price and terms. Then I’d drive to the location, park my car, walk around the property, check the mailbox for vacancies, and so on. If the property looked interesting, I’d make an appointment to see the interior.
I felt very uncomfortable doing these inspections. I had no idea what I was doing. I could not tell a good investment from one just short of displaying a BUYER BEWARE! sign on the front door. Going by the advice in the books I had studied, I would pull out my “Apartment Inspection Checklist” and insist on looking at every room, including closets, in every apartment.
A typical inspection of a four- to six-unit building would take me two hours. (To put this in perspective, once I became experienced, I could conduct a ten-minute inspection on a sixty-unit building and purchase it on the spot.)
As hungry as real estate agents were for commissions at this crazy time, and even though the majority of them had plenty of free time, many refused to work with me a second time.
They despaired of my never making a purchase. They were wrong.
After driving by about a hundred buildings and inspecting twenty of them, I made an offer on an eight-unit building with an asking price of $135,000. The Seller and I agreed to terms and I was on my way on becoming the next Donald Trump.
So I had finally found a building a was willing to make an offer on. FINALLY. After kicking enough tires, I made an offer on an eight-unit building with an asking price of $135,000. The seller and I agreed on the price and terms. My agent mailed a standard contract to him at his winter home in Arkansas, with a few blanks filled in based on our agreement. All the seller had to do was sign it, date it, have it witnessed, and return it.
That never happened.
About six months later I learned that the seller sold the building to someone else for the same price and terms as ours, about three months after he and I had struck a deal. To this day, I don’t know what happened.
- Suddenly I was back to square one.
It was my first offer or deal but definitely not my last. I did not let this fluke of an experience discourage me. I pressed on and purchased multiple apartment buildings through out my life time.
I continued to search. One day I received a call from an agent who had shown me one of her listings. She wanted to tell me that a six-unit building in a good area with low rents was being offered for a low price. I knew the area; at one time I had lived a quarter of a mile east of there.
YES. My patience paid off. I made an offer shortly after attending an open house and finally closed on my first Apartment Building.
So I say to you….don’t give up!