Complete Guide to Buying and Selling Apartment Buildings

STEVE BERGER is a real estate investment professional with over twenty-five years of expe-rience. As principal of Symphony Homes, he is an active investor specializing in creating value through various real estate mechanisms, including single-family houses, multifamily apartment complexes, and the development and construction of single-family and condominium housing communities. He holds an MBA in finance and marketing from Rice University. His other books include The Complete Guide to Real Estate Finance for Investment Properties and The Complete Guide to Flipping Properties, both from Wiley.

• Chapter 1 Introduction to Multifamily Ownership 1Introduction 1Holistic Approach 2Background 4Market Outlook 6Regional Trends 9Chapter 2 Advantages of Multifamily Ownership 13Time and Efficiency 14Market Liquidity 15Transaction Costs 16Concentration of Units 17Management and Labor Considerations 17Tax and Record Keeping Considerations 18Divestiture of Property 18Chapter 3 Bridging the Gap 21Strategies 22Leverage—The OPM Principle 23Clearly Defined Objectives 24Maslow’s Hierarchy of Needs 27Conquering Your Fears 29Chapter 4 The Value-Play Strategy 35Buy and Hold versus Buy and Sell 36Ten Ways to Create Value 39Diamonds in the Rough 47How to Tell a Diamond from a Lump of Coal 61Chapter 5 Establishing Your Niche and Locating Properties 69Establishing Your Niche 70Availability of Resources 70Property Size 71Property Age 74Holding Period 79Chapter 6 Six Ways to Locate Properties 85Real Estate Brokers 86Classified Advertisements 87Industry-Specific Real Estate Publications 88Local and National Web Sites 88Associations and Real Estate Investment Clubs 89Banks 89Chapter 7 Financial Analysis 91Valuation—How Much is That Property Really Worth? 92Two Crucial Principles That Saved Me $345,000 93Valuation Methodologies 95Financial Statements 102Five Key Ratios You Must Know 117The One-Minute Assessment 124How to Read Between the Lines 125Chapter 8 Case Study Analysis 129Case Study 1: 52 Units in Flint—My Way or the Highway 129Case Study 2: 12 Units in Saginaw—Below-Market Rents 142Case Study 3: 16 Units in Beaumont—A Banker’s REO 151Case Study 4: 98 Units in Houston—Creating Synergism through Consolidation 162Chapter 9 Negotiation Strategies and the Due Diligence Process 175Five Cardinal Rules of Successful Negotiation 176The Due Diligence Process 185Chapter 10 Financing Your Acquisition 191Traditional Financing Alternatives 192Secondary Financing Alternatives 203Additional Financing Considerations 206Chapter 11 Closing the Deal 215Closing Fundamentals 216Closing Credits Can Add Up 219Chapter 12 Managing Your Property 223Hiring a Professional Property Management Firm 224Your Role as a Strategic Manager 227Expect the Unexpected 228Chapter 13 Four Effective Exit Strategies 233Outright Sale 234Refinancing 235Equity Partnership 245Exchange of Properties 248Combining Methods 249Chapter 14 Five Keys to Your Success 255Understanding Risk 256Overcoming Fear of Failure 259Accepting Responsibility 261Willingness to Persevere 264Defining Your Sense of Purpose 267Appendix A: WWW.THEVALUEPLAY.COM 273Appendix B: WWW.SYMPHONY-HOMES.COM 275Glossary 277Index 297