As a result of large investment firms buying up single-family homes to convert into rentals, some individual real estate investors have opted not to continue to compete in the bidding war with them, instead turning their attention to apartment complexes.
While this trend can be seen across the nation, it certainly is found in Arizona where it was reported on AZCentral that Phoenix home prices surged 22.5 percent over the past 12 months, more than twice the national average.
U.S. home prices jumped 10.9 percent in March compared with a year ago, the most since April 2006, according to the Standard & Poor’s/Case-Shiller home price index.
These small apartment real estate investors can be self-funded or may be through a self directed IRA or in some cases though partnerships with other like-minded real estate investors.
Unlike single family homes, the requirements for multifamily loans (5 units and more is considered multifamily) are based on the cost of the property. Most loans under $3 million typically require a personal guarantor, but commercial loans with a pool of real estate investors on a property costing over $3 million are treated differently.
Apartment vacancies have fallen to 4.3% in the first quarter, the lowest level since the first quarter of 2001, according to an April report released by real estate research firm Reis, Inc.
The demand for rental properties is on the rise as a result of the housing bust, economic recovery, high mortgage requirements and a constrained supply of newly constructed apartments.
This information is for informational purpose and not intended to beinvestment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared