194: Apartment Building Investing In A Hot Market with Brad Sumrok
Get Rich Education
Keith Weinhold
4.3 • 602 Ratings
🗓️ 27 June 2018
⏱️ 40 minutes
🧾️ Download transcript
Summary
#194: The apartment building space is hot. Unless you're experienced, you need help from an expert that can help you navigate today's apartment environment.
Brad Sumrok, "The Apartment King", joins us today. His apartment building students get results, closing dozens of larger apartment buildings every year.
Brad began with buying a 32-unit building in 2005.
Today, he provides forecasts to the apartment industry, and hosts live training events.
Tens of thousands listen to his every word.
But is it too late to buy apartments today?
Apartment prices keep running up. Cap rates are compressed. Now, interest rates are higher. Brad tells you where to look today.
I ask Brad, "What's an underlooked apartment market or niche today?" He names exact towns.
Think you can't afford a $5 million building? Yes, you can. Brad tells you how.
Learn how to outbid others when there are multiple offers for an apartment.
His in-person events draw large, energetic crowds and he fills bus cavalcades with hopeful investors on apartment field trips.
Want more wealth?
1) Grab my free E-book and Newsletter at: GetRichEducation.com/Book
2) Actionable turnkey real estate investing opportunity: GREturnkey.com
3) Read my best-selling paperback: getbook.at/7moneymyths
Listen to this week's show and learn:
01:27 Leveraging rent increases.
04:10 Brad Sumrok Interview begins.
07:28 Is it too late to buy apartments today? Prices are higher.
09:36 Cap rate compression.
10:23 Interest rate rise.
12:06 There's still a housing shortage.
13:24 What's an underlooked apartment niche today?
15:23 Value-add buy-and-hold apartments.
19:23 "I can't afford it." Yes, you can. Here's how.
22:38 Carried interest.
24:20 Financing.
26:04 Tenant and property character.
28:05 Multiple offers - how to outbid others.
32:13 Brad's training events are super-popular. The next one is July 21st-22nd.
Resources Mentioned:
Brad's Live Event, July 21-22: BradSumrok.com
Mortgage Loans: RidgeLendingGroup.com
Cash Flow Banking: ProducersWealth.com
Apartment Investor Mastery: BradSumrok.com
Find Properties: GREturnkey.com
Transcript
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| 0:00.0 | Get Rich Education is brought to you by Ridge Lending Group, apartment investor mastery, and producers' wealth. You're listening to the show that has created more passive income for people than nearly any show in the world. This is the powerful Get Rich Education. The President get rich education welcome welcome to gree episode from glasgow scotland to glasgow |
| 0:36.4 | and across 188 nations worldwide, this is get rich education. |
| 0:43.4 | I'm Keith Weinhold. What's the latest in the larger apartment building space, specifically 60 units and greater? |
| 0:50.0 | That's our topic today. Now, you've heard me mention that larger apartments are a trickier place |
| 0:57.0 | to navigate than they were, say, five years ago, but today's guests can help steer you through |
| 1:02.1 | that like almost no one else can. Now, several weeks back, we discussed single-family home |
| 1:08.3 | investing, and specifically in central Florida. Then three weeks ago, |
| 1:12.9 | we went larger and spent a show focused on duplexes and fourplexes. This week, it's larger |
| 1:20.2 | apartment buildings. And it's not that the opportunity is gone there, but you do have to look |
| 1:25.4 | harder to find it. Now, I want you to consider a little something |
| 1:30.1 | about leverage here first. Last week, I mentioned that if you get a $30 annual rent increase |
| 1:38.4 | on your $1,000 rent, well, that's only a not so thrilling 3% rent increase, but when you're leveraged, you might have a $200 cash flow from that unit. |
| 1:49.8 | Well, then that $30 increase, therefore, means a 15% increase to your cash flow. |
| 1:56.3 | That matters. That's the money that you feel in your pocket every month. |
| 2:00.2 | And look, you're actually |
| 2:01.6 | benefiting from leverage again because, look, instead, say that you had that unit in a paid |
| 2:08.2 | off position. Well, if it's in a paid off position, you might have, say, a $600 cash low on that |
| 2:14.6 | unit because you have no mortgage payment. Well, you're still only going to get the same $30 rent increase on a $1,000 rent even if it's paid off. |
| 2:23.6 | So then your $600 cash flow, that only went up to $630. |
| 2:29.0 | Well, that's just a 5% cash flow increase because the property is paid off. Remember, you had a 15% cash flow |
| 2:36.8 | increase on the leveraged property. And in either case, it's just a $30 rent increase. So my point is, |
| 2:44.5 | yes, leverage wins again, financially free, just beat debt free, yet another way. |
... |
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