How To Buy Apartment Buildings With Private Money

Posted by  
Filed under Private Money Articles

One of our PMBP Platinum students called Patrick and I this week to get some last minute questions before he does his first “private lender group
pow wow” for a bit of our advice.

Anyhow, we got to talking and he just got a HUGE property under contract ($1mil apartment building) and already has all of the private $ lined up for it… 30 days before close (we taught him how to get those lenders).

Long story short… Tim’s business model for buying apartment buildings with private money is just like mine.

Buying Apartments With Private Money Simplified Process

Here’s how it goes:

  1. Market for sellers who have owned the property for 10 years or more (the more time the more equity)
  2. Negotiate with seller to have seller  carry as much of the note back as possible. I prefer at least 80%.    – Tim got a 10% rate which still helps him cashflow the property, I usually go for between 6-8%.
  3. Bring in private money lenders for the downpayment.
    1. Tim brought in $80k in private money from two lenders for this deal.
    2. Own a property w/ HUGE leverage, positive cashflow, and little to nothing out of your own pocket.

Sounds simple… cause it is.

The trickiest part of the whole thing is finding enough property owners to talk to on properties that match your buying criteria.

Not all sellers of course will want to or have the means to be able to carry the note.

However, when you really target the RIGHT sellers you increase your odds and closing percentages big time.

Types Of Property Owners I Target

I like to target this type of seller for apartment buildings:

  • Owned property for 10 years or more
  • Is nearing or in retirement (45-60 years old)Property is in good shape but might need a bit of cosmetic work/upgrades…
  • …and as a bonus. If they seller manages the property themselves it’s even better!

It’s better because when you say the right things you can show them how you can pay them the same or more than they’re currently
making in cashflow per month if you buy the property… and they no longer have to worry about managing the place, doing repairs,
fixing toilets, etc.

Once you’ve negotiated with the owner on the purchase price and seller carry, now it’s time to get a hold of your private lender prospect list and start using the 30 second commercial, setting up 1 on 1 appointments… and gear your presentation a bit toward the end on this specific deal.

Let the strength in the deal numbers “sell” the deal for the private lender to show them it’s a no lose for them.

For Tim, our student… he got the property under contract and the seller agreed to close in I think it was 60 days… don’t quote me on that though.

Then, Tim had already been talking to people and planting seeds about what he’s doing and giving his 30 second commercial.

So, he went back to those people who showed interest and told them about the deal… and asked for a 1 on 1 appointment to show them more details.

He secured the one lender for $40k using his presentation…

… then asked that lender if he knew anyone who would be interested in this deal.

(KEY: Ask for referrals… that’s one of the best sources of instant credibility and makes it much easier to built trust with the referral).

Tim talked to the referral, presented his presentation and deal… and locked up the other $40k he needed right then and there.

Done deal.

The only difference between Tim and other people who haven’t seen this kind of success is that he took what he learned and took action on it.

He did a great job finding a great deal… and we helped him get the confidence to get the private money for the deal.

Here’s the stats:

  • Purchase Price: Approx. $1,000,000
  • Seller Carry: Approx.   $      920,000
  • Private Money: $        80,000
  • Money out of Tim’s pocket = $        0

(I believe the private lenders are paying for the closing costs too for Tim!).

That goes to show that there are great deals to be had out there and that those deals go to those who take action on what
they learn.

So, get out there and use some of the tips from this article to find a great property and fund it with private money so you don’t have to take a dime out of your pocket to own a million dollar property.

Lol, I get emails every week from people asking if the “no money down” deals are real… they’re skeptical.

Well… they’re 100% real… they’re all over the place… and if you don’t think they are out there… well… more for me and Tim! 🙂

– Trevor

Member Comments

9 Responses to “How To Buy Apartment Buildings With Private Money”
  1. Carl Marion says:


    I strongly believe in the no money down deal, and I’ve completed about 5 myself. I’m currently working on a $1.1M deal in which I will need private funds for the down payment requirement of $100K. Where should I start with your available sources?

  2. phil cowherd says:

    I would love to see the income and expense proformas (Before and after sale) on this deal. Phil

  3. Judy Dandridge says:

    Where do you find apt. owners, especially those who have owned properties 10+ years?

  4. Luis says:

    Wow, my congratulations go out to Tim! I know it can be done and that’s pretty much the same business strategy I have here at our company so it’s very encouraging to hear that! I’d like to get in touch with Tim and bounce some ideas around

    all the best

  5. Edna Brown-Powell says:

    Congrats Tim!

  6. Trevor says:

    Hey Edna! Great to hear from you!

    Ya, Tim did some great work with that deal! And private money made it happen!

    – Trevor

  7. Shantelpws says:

    Hello, I was wondering if you could tell me where is best for researching listings for apartment complexes. Preferably anywhere in the country to be able to conduct a search of many areas? I am just not trying to get into purchasing apartment complexes and am very unfamiliar with the tools necessary for doing the research. If you could help me with this I would really appreciate it! Thank you!


  8. Anonymous says:

    Hey Shantel,

    One of the more popular places to research commercial property (including apartment buildings) is

    That’s a good place to start.

    – Patrick

  9. Pears76 says:

    I am having trouble understanding seller carry back.Is there two payment made on this deal. Interest for the seller and interest on the private money.

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!