Apartment Investing for Beginners in 2020 – Local Records Office


LOS ANGELES, CA – Starting, as an apartment investor is a good thing because you will gain tons of knowledge on how property investing works. The cash flow that comes from renting apartments is great along with the loans the bank gives out. The professionals at the Local Records Office talked to a few investment experts on how newbies can make money by investing in apartments to rent.

“Ever since I was younger I noticed there has been a big demand in apartments all across the country, and we expect that to continue. The biggest groups in demand that I’ve seen are ‘echo-boomers’. These are the children of baby boomers. With the growing demand on shopping centers, it brings in demand for apartments in the area” says, Christopher Loner from RT&Y Realtor LLC in San Diego, California.

Getting a Loan From a Bank

“Loans are widely available to borrowers to buy his or her first apartment building. Banks love lending to apartment investors because the income stream is consistent and steady. Banks see apartment investors as a safe loan for this reason unlike lending to new homeowners that will not bring in income besides the mortgage every month. “ Says Brandon Christenson from Villa Doors Investment Group in downtown Los Angeles, California.

4 Things to Look Out for When Investing in Apartments

Have a goal: You need to have a goal when investing in apartments, is your goal to benefit from the cash flow? Earning extra money to prepare for retirement? Are you planning to live in the apartment? Is it all three? You need to think about how you’re going to accomplish a goal.

tArea / Location: There’s a saying that goes “You can fix a property but you can’t fix a location”. If the location is declining the property will go down with it, the tenants will start to move out and that will be a bad thing.

The first thing you should look for is JOBS. How is the job market in that area? If there are no jobs there will no tenants, that simple.

Contacting the local management company in the area and ask them about the employment market is a great way to start. Management companies know what attracts tenants and what makes them move, most of the times they will let you know upfront.

Property: What is the properties condition? You want to know what you’re getting yourself into before investing in an apartment. You need to look at two things the exterior and the interior. When looking at the exterior you need to pay attention to:

  • The condition of the roof
  • The landscape
  • Look for what needs to be repaired
  • Cracks on the wall
  • Cracks on the floor

When looking in the interior of the apartment look for these things:

All of these things are crucial to look for as a beginner. You don’t want to buy an apartment only because it was on the market. The best thing to do as a beginner is to find an apartment with the least repairs needed. The last thing you want to do is major rehab. Too risky!

Numbers: You need to make sure that the properties income exceeds the properties expenses. By giving the numbers 12 months to see if money is being made or not.

Management Strategy (BONUS): The last thing you want to do as a beginner is to deal with tenants on your own, you need to hire a licensed management company to collect rent, hire the right people to do repairs, give out eviction notices and all that’s needed to do.











The Worst Tenants of All Time – Local Records Office

LOCAL RECORDS OFFICE – Renting an apartment to tenants is not easy, many tenants pay rent late, are filthy, have more people in the apartment than what they put in the application, have loud pets that bother other tenants, smokers and many more.

I manage over 20 properties right now and spend less than 4 hours a week and am even reducing that.   Right now is a great time to own rental homes for both cash flow AND appreciation. When I ask rental property owners to explain their asset most will start telling me about the physical property. I disagree.

Your biggest asset is your tenant. Finding a good tenant is so important I want to talk about some of the high-risk tenants that I have encountered. You have to be very careful here as these could be protected classes and I am not saying to rent to anyone on this list. I am simply pointing out that these could be a higher than average risk for you as a property owner. Please do not discriminate against a protected class.

Young Tenants That Have Never Lived Out of Home or With a Partner

You will normally see this with younger people. Often times they have recently left home and need roommates to help cover some of their costs. This is exactly what I did. The biggest problem here is that people that have never lived together soon learn that they can’t.

You know what I am talking about; one is a slob, one stays up partying too late, one does not cover their portion of the bills, and this list can go on and on. Trust me if they don’t get along and one moves out you will soon find yourself with a vacancy and possibly one that is returned in less than desirable condition.

Tenants Who Are Divorcing

Again be careful here as this is a protected class. As we know many marriages end in divorce and often times it is not pretty. If a divorce is going to happen it may happen sooner than later so a recent marriage can be risky but the biggest issue here is a recent divorce. One of two things could happen with a divorce and one of the two moves into your house or apartment.

They don’t get along and the ex-spouse comes over causing problems after they have had a few drinks. The next thing you know the neighbor is calling saying the cops are at your house again.

Or even worse, they decide to get back together. I know I’m so harsh. When they get back together what do you think is going to happen? That’s right, you have another vacancy.

Tenants Who Work Part-Time or are Self-Employed

I hate to say this since I am self-employed but the fact is most small businesses go out of business. If you are reading this you don’t fall in that category. Have you ever rented a contractor or handyman?

I have several times with less than desirable luck. Most small business owners are great at what they do but aren’t so great at running a business. They don’t understand how to generate business and how to keep the income coming in. They get busy doing what they do and when it is done they don’t have anything to do. Make sense?

If they do run their own business be sure to ask them questions about how they generate leads and how they keep their cash flow positive. Also, ask for a business card to help verify that they are really not self-unemployed.

Tenants Who Lost Their Job or Are Changing Jobs

This is especially true if there has been more than once in the last 24 months. This is an indication of instability meaning unstable in your rent also.

Often times they will not disclose many jobs or resident changes on the application which is why calling the last two landlords and asking how long they have lived there is important. Also, many times recent addresses will show up on the credit report so you can use that to verify missing information.

Tenants Who Have Annoying Dogs or Cats

These tenants are the worst; they have loud pets that bark all day and all night. I was renting to a certain tenant who left their small dog while they go to work from 9am to 5pm.

The dog will bark from 9pm to 5pm it will bark because it was along, it will bark at other residents who pass by, it will also bark at people who it saw pass by in the window. When the tenant came home from work the dog will continue to bark. I got so many complaints from the neighbors.

The Tenants Who Think They’re in a Rock and Roll Concert

I want my tenants to enjoy the apartment they rent but sometimes I get people who play music so loud they must think they’re in a rock and roll concert, they play music so loud they make the entire building vibrate. I find this disrespectful and ignorant.

The Filthy Tenant Who Infests the Building With Cockroaches and Rats

These are the most disliked tenants; these types of tenants could infest the entire apartment building with cockroaches and rodents. The tenants will usually not pick up after themselves and leave garbage all around the apartment and garages and therefore attracting mice.

Please use this information for what it is worth. It is not a reason to deny a prospect but is a good way to raise red flags and to be extra careful with the screening process.   Good luck!

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