The property in Fort Lauderdale, Fla. was originally valued at $285,000. Clint Gordon, a private investor in multifamily properties, offered the bank $50,000 cash—and within 10 days had closed the deal. A few days after that, he began renting it for $15,000 a year.
"Anybody that’s getting into this business now, you get a whole lot of return if you’re paying cash for properties," he says. "You're just buying them so cheap."
Prices are “incredible” in Indianapolis as well, says Barb Getty, who owns 27 apartment properties in the downtown area. "You can start small like I did—20 percent of 40 thousand bucks isn’t a lot of money.”
Just as there have been massive price drops for single-family homes over the past three years, there have been big declines for apartment buildings. That suggests that it’s a good time for investors who want to be landlords to start buying.
But as with all investments, the story isn’t quite so simple.
Where’s the Flood?
Investors who thought that a tsunami of dirt-cheap multifamily properties would wash over the U.S. market in the past two years have been largely disappointed.
The distress was limited to certain places and property types, says Hessam Nadji, managing director at real estate investment services firm Marcus & Millichap.Page 1 of 5 | Next Page