Apartment Investing - How to Buy Your First Apartment Complex - Ideal REI

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Apartment Investing – How to Buy Your First Apartment Complex

I decided to become an apartment investor at the end of 2016. It was a huge move for me because I had only invested in small multifamily prior to that.

It took me an entire year buy my first apartment complex – we closed November 2017. I think back on how I got here and realize it was a really long and difficult process – one that I almost gave up on.

That’s right, I almost gave up on this goal.

It’s crazy to think that I almost walked away from this before I even got started… That’s why I’m sharing this story with you.

We’re going to talk about apartment investing and how you can buy an apartment complex too, even if you’re new. The lessons and steps I took to do this really apply to just about anything in life from real estate, business, investing, or anything else.

First, let’s talk about the most important key pieces of apartment investing.

Your First Apartment Complex Investment

When I first got started trying to syndicate an apartment building a deal a year ago, I remember thinking,

I feel like there are 4 or 5 first steps, but you can only take ONE first step.

It felt overwhelming and that’s why I almost gave up. But, accomplishing something huge in your life is a lot like tending to a garden.

The first steps are to just get the soil, water, and sunlight conditions right. You need to set the conditions for success or there is no way you’ll make it, and you need to do them all first and at the same time. Each piece is important, and each needs to happen at the same time.

Then, you plant the seeds. You need to know what you’re planting and where because some plants need more sunlight, others need more water, and some plants will overgrow and destroy others.

The best gardeners meticulously plan every detail of their garden just like you need to plan every detail of your goals.

Some of the seeds won’t sprout, some of your plants will be eaten by bugs or wither due to fungus or disease. Some of your preparation will be wasted or will bear no fruit.

Remember that. It’s one of the most important parts of this all.

You might need a lot of water in July but get it all in May when the garden isn’t ready for it. Or, you might be ready for the rain and just get sunlight for a month.

This is just like ‘opportunity’ – it might come knocking when you aren’t ready but when you are totally ready and prepared it seems to just avoid you.

1. Focus on Relationships.

The first part is to set the conditions – essentially, gather the soil, sunlight, pot, etc. For me, it started back in November 2016 when my wife was pregnant with our second daughter.

Every year I have an overarching goal for the year and I usually try to summarize it in 2 or 3 words. For example, I had previous goals of “make money 2014” and “kill debt 2015.”

I had been thinking about my 2017 goals for weeks and nothing seemed appropriate. Of course, I wanted to finish paying off some debt. I always want to earn more money, to grow my website, buy more property, syndicate a deal etc.

So many goals, but nothing seemed to summarize it all.

I probably spent 15 or 20 hours sitting there just thinking about my goals. Somehow it finally hit me…

Relationships Are Key to Apartment Investing

I used to be a “lone wolf” type investor – I was afraid if I told my secrets then I’d just be training my competition and someone would “steal” my deals.

Then I had created my website in early 2016 and started sharing that knowledge. I was apprehensive at first, but eventually, it grew on me and I felt good to share it.

Soon, I started to get emails from readers and other websites and was asked to write for them. I didn’t realize it, but I was building relationships with a lot of people I would never have met simply because I was sharing rather than hoarding.

Eventually, I started to connect the dots. I realized there was a difference between the most successful people I knew and the rest of us. The big difference was they had a lot of positive connections and relationships.

I took it a step further and realized that most of them were fairly open with their knowledge and experience. So, in 2017 I took a dive and tried to change my mentality. I decided I’d spend the entire year meeting people, sharing knowledge, and building relationships!

It was “Build Relationships, 2017!”

I’d build relationships by sharing my knowledge and adding value to the people around me.

You should do the same. In order to become an apartment building investor, you need to become a relationship builder.

2. Build a Brand

I didn’t realize it back at the beginning of 2016 when I started this website, but it would exponentially help me in real estate, apartment investing, and business in general.

Simply having a website with solid content and traffic creates a level of legitimacy to my name. Your experience and knowledge are laid bare for all to see, so they can easily look and glean your philosophy, knowledge, and style from your writings.

Then I started to appear on some podcasts, write for other (larger) websites, and my name recognition likewise grew.

Soon, I would go to almost any networking event and at least 1 person already knew my name and background. It’s weird because I don’t see myself as a guru or anything, but it is immensely helpful to be recognized.

My potential partners would look me up on the web and find my content and website. This creates a great first impression, builds credibility, and allows you to take those first steps to partner with much bigger fish.

Then I started my own networking events.

It was pretty crazy, but I started doing my own networking events in the Boston area. I was nervous that nobody would show up. There is a lot of self-doubt involved with starting something like this.

But… people showed up! In fact, I was averaging 20-30 people per event. Eventually, we got up to around 50 people at some events.

This seriously helped to grow my personal brand.

So, you should build a brand and create your own networking events.

3. Network Like It’s Your Job.

Most people are absolutely shocked when I tell them I’m an introvert.

It’s because I’m fairly outgoing and talkative at most social events.

Most relationships won’t sprout into anything at all, but some of them will grow into something huge. – Eric Bowlin

In December of 2016, I decided I would attend at least 4 networking events each month in order to further my goal of building relationships.

I’ve been to networking events before but I usually just sat in the corner and didn’t interact much. I realized this wouldn’t further my goal so I started to look at networking like it was my J.O.B.


You Don’t Grow in Your Comfort Zone

I had to attend these events in order to meet people so I could further my other goals. I had to follow up with everyone to create the foundation and then follow up with them over time to foster those relationships.

Most relationships won’t sprout into anything at all, but some of them will grow into something huge. But, like gardening, you need to plan your networking and relationship building.

Here are some key ingredients I found useful:

  1. Know exactly who you want to meet – create the avatar of who you want to add to your network, then go seek that person.
  2. Focus on getting to know 3-5 people in any one event. Any more and you’re not building rapport any less and you’re potentially being too shy and wasting time (this is heavily dependent on the length of the event).
  3. Focus on the follow-up. I’d have to say that at least 90% of people never follow up after meeting someone. So, I focus on being one of that 10% who follows up with everyone.
  4. Find a way to add value. Naturally, people are focused on themselves (even if they don’t realize it). So, find a way to add value to what they are doing and it will help you take that first step toward building a relationship.

I go into a bit more detail about networking in a recent article I wrote networking like a pro.

Relationships Are Like a Vine

At these networking events, I began to meet some awesome people. In January 2017 I went to a simple meetup about apartment investing. There, I met some other people who were hosting an event, so I went there too.

I went to their event and learned a bit about multifamily and met some other great people. The key here was that I started to develop a solid relationship with the guy who hosted it, who owns around 2,000 doors with his wife.

Just by being around them, I began to pick up knowledge. Also, as I built relationships with them, I was able to occasionally call and ask some questions about deals I was underwriting.

The relationship I built gave me the foundation I needed to meet my future business partners a little later.

So, even though I haven’t done a deal with any of those people who were influential to me, those relationships helped me in ways one could never have predicted.

4. Become an Expert at Underwriting.

I began to underwrite deals. The plan was to find a good deal, bring it to a bigger investor, and ask to partner on it. If I was working on a deal with someone, I’d be able to call or email and ask some questions.

I was adding value to someone else and also gaining mentorship at the same time.

I remember several times I would spend 3 or 4 hours underwriting a deal and I would think it was literally the best deal ever. So, I’d package it all up and send it over to someone – the numbers fit, the location was good.

20 minutes later I’d get a one or two line response.

…Adjust the cap rate, change the rents, expenses are too low. Make the changes and let me know.

I’d make the changes and my heart would sink… The deal was no good.

I dedicated to underwriting deal after deal to become an expert at it. I was spending 6-8 hours per day just underwriting apartment complexes. It seemed like a waste of time, but, it was building my experience as an underwriter.

The only problem was, I began to feel like…

There were just no deals.

Looking back, I underwrote around 250-300 different apartment complex deals this year. Every deal varies, but it could take anywhere from 30 minutes to 4 hours to go through just one deal. Overall, I think I spent at least 600-800 hours this year just looking at numbers on the deals I never bought.

That’s equivalent to about 20 typical work weeks.

But, that’s OK. I was still building the foundation and it came in handy.

People want to work with someone who knows what they’re talking about. The only way to know what you’re talking about is to spend the time learning – and the best way to learn is to do it.

So, become a master at underwriting deals, even if you know the deal won’t meet your criteria – you’ll become more of an expert and more of an authority.

5. Go to Conferences to Meet Other Apartment Investors.

Conferences are weird environments. You’re away from your family for 2-3 days, bored at the hotel, and hungry for knowledge.

But, everyone else is having the exact same experience! So, you get to spend 48-72 hours with people that are all bored and looking to meet other like-minded people.

The best part is that you can build some solid relationships in a 48 time-frame if you’re spending hours and hours with them.

So, I started going to conferences to meet other apartment investors. One, in particular, was looking for deals in the Dallas area which is where I was living.

We got to know each other a bit during that conference and decided to keep in touch after leaving.

Keeping in Touch

Since I had become so good at underwriting deals and because I was living in Dallas, he would occasionally call me and ask me about deals he was looking at. Often, we were looking at the same deals and we’d bounce things off each other.

What do you think about the labor costs over at this place?

I’d respond:

I think this is a good deal but I’m not sure about the sub-market.

And so on…

The seed was planted at the conference and the continuous back and forth was nurturing that relationship and building trust.

Then one day we realized we were both going after the same deal pretty hard and he suggested perhaps we go after it together. So we teamed up and put in an offer together.

We didn’t get that deal, but the seed sprouted.

You never know what kind of seeds you’re planting at a conference, but the key is to get out there and start planting them!

6. Build a Team.

Building an apartment investing team should take place before, during, after, and always. But, I have to put it in an order so I’m placing it here because it flows better with the story.

Normally, you think of meeting brokers, investors, lenders, insurance brokers, etc. These are all fundamental team members that will make you successful.

Here though, the team was more than just that.

The investor I mentioned earlier and I were both looking in Dallas together, but we were both looking at deals in other markets. He is more established than I am so he had relationships in several other markets and occasionally he’d ask me what I thought about those deals too.

Together, we figured we could get a deal done that was about 60-70 units in size. Then, one day, he thought that perhaps all of us from all of the different markets should come together and go after one big deal.

Instead of going after a 70 unit deal with just two partners, 5 of us could go after 150-200 unit deals.

We all jumped on a conference call, got to know each other a bit, and agreed to do it!

We’d all look for deals in our markets, but then we’d all go in on the first good deal we found and all liked! It seemed to make sense so we all just kept plugging away at what we were doing.

If you are lacking something on your apartment investing team, it’s important to find other GPs to partner with. It could be their underwriting skills, construction experience, relational capital (and ability to raise capital), and other things.

7. Wait…

Alright, so everything seemed to fall into place pretty easily. I learned how to underwrite pretty well, built a team, was meeting a ton of people and building lots of relationships.

Going for coffee 4 or 5 days a week and doing 6-10 networking events per month was fairly normal at this point.

I thought I was doing everything right. Then…

…nothing happened.

Every potential deal fell through. We got outbid by crazy amounts on every deal we made offers on.

By the end of March, I was almost ready to give up. It had only been 4 or 5 months since I started.

I spent months of time, hundreds of hours, and had nothing to show for it.

During this time I had passed over several potential small multifamily deals – my bread and butter. I knew I could have easily made a good sum of money on any one of those deals and I had a lot of cash sitting on the sidelines.

I started to get anxious and thought perhaps my time was better spent doing what I know.

Getting Back on Track

Then, By April 21st someone I consider a mentor was talking me off the ledge.

The deal….Personally, I think there are better deals.  While it is taking a long time for you to actually get a deal, I think this particular deal will be very tough…

He wrote later that day:

I know this extremely frustrating… and I think what you are seeing is fairly normal for the current times.  I think looking outside of Dallas and OK is something to consider.  It is all about relationships which takes time to develop.

It worked for a while, but I started to get anxious again by June.

So I flew back to Massachusetts to start working on my portfolio. I got there and immediately put a 2-family under agreement. That deal closed at the beginning of August.

I felt like I was cheating on my goal to syndicate an apartment building, but I can’t leave that kind of money sitting on the sideline for a year. At some point, you have to put that money to work.

At least, that was my rationale.

8. The Pieces Will Come Together, Sort of.

Practically the same week I closed on my other project, I got a call from my partner:

We won the deal in San Antonio!


I was familiar with this apartment deal but I just figured it would fall through like all the others. That’s why I went ahead and bought my duplex.

I just spent most of my money on my new deal and wasn’t 100% confident I could raise my portion of the capital! So, naturally, I responded:

Awesome! I’m ready to go!

Part of this probably comes from my decade in the Army – being faced with overwhelming odds doesn’t really phase me.

Plus, it wasn’t entirely untrue. I committed to the number because I had the cash to back me up – if I couldn’t get to my number I planned to just invest the difference.

It wasn’t 100% guaranteed I could reach my goal for the capital raise on the apartment complex, but I was not about to let this opportunity go by the wayside. If you wait to have 100% confidence before taking action, you will NEVER accomplish anything.

Just like the analogy I gave before, sometimes you get all the rain when you least want it and you have a drought when you most need water. It’s the nature of the beast!

You just have to make due with what comes.

Ultimately, I surpassed my goal and was able to close the deal with my partners.

The Biggest Lessons Learned

1. Building Relationships Early Helps, a LOT.

I finally had a deal in my hands, and now it was time to go back to all those relationships I was building over the last 8-12 months.

I must say, it was nerve-wracking to go to a bunch of people and ask them for money.

But then something amazing happened – most of the people I contacted were very interested in investing! Many didn’t have the funds or the deal didn’t fit their particular goals, but many put me in touch with other investors and it helped to grow my network.

During the capital raise portion, my investor list almost doubled in size! It’s strange how this happens.

2. Don’t Listen to Naysayers.

I’m pretty far along in my career as an investor, so I rarely encounter (or listen to) the “Chicken Little’s.”

You know, the people who are always negative and say “if it was so easy, everyone would do it!”

In my case, it was a family member and recent (and now former) business partner. They felt that the time I spent building my brand, my website, and my networking events were all just excuses to not focus on things he considered “more important.”

In essence, it was all an “escape from reality.”

What? Was he crazy? (Yes, he is a little crazy.)

More realistically, he felt I should focus on the small day-to-day details of operating my portfolio rather than focusing on building my brand.

Don’t get me wrong, those small details will kill you every time, that’s why I have a partner (my wife) who focuses exclusively on that.

Overcoming that negativity was very difficult and took us months. But, the fact is none of this could have happened if I didn’t build my brand, network, go to conferences, and build relationships.

Point is, it’s easy to listen to naysayers about things where the benefits are hard to quantify or are intangible and may not be realized for months or even years.

The naysayers may have their heart in the right place by telling you to focus on what’s tangible, but they are doing you a disservice.

So, if someone is adding negativity to your life, just cut them out and move on.

3. Plan To Work At It For a Year (or More)

When you need water you get sun and when you want clear whether you’ll just get storms.

Or so it seems…

The moment I lost focus, I got smacked in the face. Fortunately, I was able to make it all work out. But, it won’t work out so perfectly every single time.

Getting your feet wet with something totally new will be hard and take time. So, stick with it.

4. Big Deals Are Easier Than Small Deals

I’ve spent more time and energy on the duplex than 192 units in San Antonio.

And it will require more of my attention every month than the deal in Texas.

Can you guess which one will pay me more over the next 5-7 years? Correct, the deal in San Antonio.

Small deals feel easier because they are smaller. They are more tangible and easier to wrap your brain around because the dollar amounts are numbers you’re used to thinking about.

But, it’s a facade.

Just like the naysayers tell you to focus on the here and now, they’ll also tell you to buy a duplex instead of an apartment complex.

I’ve made a ton of money in small multifamily, and I believe it is a great place for a nobody like me to become a somebody. But, I’d probably be a lot further along if I had started syndicating back in 2009 than buying triplexes.

There is no reason to think of all the “what-ifs.” Instead, I will just focus my future efforts where I know the most benefit is.

I Can’t Wait For The Next One

Since then I’ve closed on other deals (including another apartment complex). It took a long time to get the first one, but then the following ones get easier and easier.

Push through the feeling to quit, drive on with your goal to invest in apartment buildings, and stay motivated!

As for me, I can’t wait to get involved with my next one!

About the Author Eric Bowlin

Eric is an investor that achieved financial independence at the age of 30. He started in 2009 with the purchase of his first triplex and now owns over 470 rental units. He spends his time with his family, growing his businesses, diversifying his income, and teaching others how to achieve financial independence through real estate. Eric has been seen on Forbes, Trulia, WiseBread, TheStreet, Yahoo Finance and other financial publications. You can contact Eric by emailing him at [email protected] or with this contact form

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  • Mark Kenney says:

    So excited for you Eric! Patience & Persistence are key to this business. There is no question, that relationship building is the key to this business. Give to others with no expectations of getting something in return!!!

  • Impressive to say the least. There are so many things to take into consideration for any property investor and its sometimes hard to prioritize the right way. This is why having a strong network of contacts is imperative and goes a long way in ensuring long term success. Well done once again.

  • danny says:

    Great article! I have found in recent years that when I focus on providing value first, I build more substantial relationships that helps me out a lot more in the future. Do you recommend any specific books that I can learn about underwriting multifamily deals?

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