Lance Edwards' Apartment Wealth Info

My real estate niche is multifamily properties – apartments. I buy, operate and sell apartments and train entrepreneurs on multifamily investing.

Now, this is not a pitch to persuade you to choose apartments as your niche but rather a lesson on dispelling a common limiting beliefof real estate entrepreneurs. And to teach the lesson, I first must explain why I choose apartments.

Why I love apartments:

1. Apartments are made to cash flow. Houses generally are not.
2. Apartments are cheaper than houses – per door. There is a better cash flow return on my investment.
3. I can buy apartments using none of my own cash – that’s right zero.
4. I get far more leverage with apartments – I can concentrate my effort on a smaller number of large deals. Bigger deals = bigger profits.
5. I can create equity with apartments by raising the rents and lowering the expenses.
6. I can pull cash out of my property tax-free without selling the property.
7. I can flip apartments just like houses but with larger fees.
8. The apartment business can afford to hire property managers.
9. There is less competition for apartments than houses.

That last advantage of less competition is the point I want to speak about. After all, with all of these logical advantages, you would think more people would be in it.

So why are they not?

The reason for less competition is due to limiting beliefs among the real estate “investing” community.

Let me tell a story to make the point. Recently, I spoke with a very successful house rehabber in Houston – let’s call him Bob. I asked how he was doing. Bob told me, “I’m doing great. My current goal is to acquire 100 houses around Houston and hold them all for cash flow.”

Well, as an apartment owner that loves cash flow, the idea of driving all over Houston to lease and tend to 100 houses seemed terribly inefficient and unattractive to me.

So I asked, “Bob, instead of buying 100 houses, have you considered buying a 100 unit apartment building? It would cost less money and your staff (not you) could concentrate leasing and maintenance at a single location?”

His answer was very revealing to me. He said, “That makes sense. Maybe some day I will graduate to apartments.”

And that is the attitude that most real estate entrepreneurs have about apartments, i.e. they believe they need to graduate. And as a result, it’s an open market for people like me and you.

The thought that you need to graduate to apartments is a limiting belief. My first deal was a four-plex – bought nothing down with 100% carry-back by the Seller. My second deal was a four-plex as well – again nothing down.

I was blessed that my real estate mentor encouraged me at an early stage to pursue multifamily. I never was exposed to the mindset that I needed to graduate. And so I’m here today to expose this limiting belief to you.

You don’t have to graduate to apartments. You can start with apartments. You can do apartments and houses – flip houses; hold apartments. It’s a great strategy.

There’s lots of attention to houses because people understand houses. They may live in one. Well, have you ever lived in an apartment? I bet you have at some point. OK. You are now qualified to do apartments.

Guard yourself against limiting beliefs. Stay focused but think big.

Lance