By 
It sounds totally impossible, to take a large apartment building and assign the contract for tens of thousands. Can you really do that, and if you can, how is it done?
Well the answer is yes, you can flip an apartment building. People no smarter than you are doing it across the country every month, maybe every day. The way you do it isn’t that different from the way you flip a house, but with a few tweaks. In fact, it’s probably a little easier than flipping a house.
You may be familiar with this series of events. 1) find a profitable deal, 2) get the deal under contract, 3) find a buyer with cash, 3) assign the contract to your buyer for an assignment fee, 4) deposit the check into your bank account.
Variations are in 1) and 3).
First, when you’re trying to find a property at a wholesale price that the ultimate investor is still interested in, you need to know what it takes to create value in apartment buildings.
There’s more to it than just looking for dilapidated properties with deferred maintenance. You are looking for quality properties whose owners have been laid off for whatever reason and are in a bind because of it. One must have factor is the location. The poor location is hard to beat.
The deal has to have advantages; there must be things currently wrong with the property that will represent increases in value once they are changed. So, if the property is 20-30% vacant, the rents for the occupied units have not been raised in 5 years and there are repairs that have not been done, creating a potential advantage. A buyer you resell to could walk in, change all of these factors and cause a huge increase in property value.
Large apartment complexes do not normally attract first-time investors. The people you resell to are going to be professional investors who know what a good deal looks like. If your offer doesn’t have these positive factors and you don’t have a location to work for, they’ll see you right away and say goodbye.
Also, when you have these three items present on the property, the owner is very likely to be financially harmed and motivated to sell cheap just to get out of the property. Deferred maintenance drives away good tenants, rents must be reduced to fill units, lower rents attract lower quality tenants, lower quality tenants are tougher on property and don’t pay, and the downward spiral continues.
It is these very elements that you put to work in your negotiations to get the affordable contract price you need. Without a big upside, no end investor will be interested, so you need to be aware of these elements.
The other thing that is different with apartment investing is the type of buyer you will be selling to. Home renovation has become so popular that you often find yourself reselling to relative novices, which comes with its own problems. When investing in apartments, almost all the time it comes to professionals.
These are people with multi-million dollar lines of credit, bank accounts with a few million cash in there, or both, who have absolutely no problem with you making a $50,000 profit by assigning them your contract. They know very well that they’re going to make a couple of million off the property in two years or so, so fifty thousand dollars is a small price to pay.
The truth is, by saving the ultimate investor the time and hassle of having to go looking for the property, you have created a tremendous amount of value for them. He/she will gladly pay your fee, making sure he gets the money because they want you to go out and do it for them again.
This is the world of flipping apartment buildings. It may be a little different than what you are used to.