History has proven that the best way for an individual to accumulate wealth is through buying and holding real estate for the long term as a passive investor.  Over the last two hundred years, about 90% of the world's millionaires have been created by gains in real estate.multi-unit - small apartment building investing  There is no reason to expect this to change in the years ahead, even with the stock markets hitting record highs


Real estate is the only asset that pays for itself from the rental income it produces.  That does not happen with a stock as the average dividend yield is only about 2% for a member of the Standard & Poor's 500 Index.  For an individual, the most expeditious way to develop a portfolio of income properties is to buy small apartment buildings that are turnkey properties as a passive investor, live in one unit and rent out the rest.  With the rental income from the other units, the owner can then continue to buy additional turnkey apartment buildings, holding the properties for the long term.

In addition to buying other apartment buildings, there is much an owner can do to increase cash flow from the present units.  Additional apartments can be constructed, if there is space and it is legal.  Bedrooms, bathrooms, and closets can be added so that the rent can be increased for the existing apartments.

If the apartment building is four units or less, it qualifies for owner financing.  That makes it easier to get approved for a mortgage.  There will also be a much lower interest rate; and the down payment required will be smaller, too.  That leaves more cash left over to buy more small apartment buildings in the years ahead to expand one's holdings.

What is most important in any investing is risk management.  

Buying a turnkey small apartment building is an ideal way to practice risk management in real estate investing.  When an investor buys a turnkey apart ment building, they are acquiring a property that has been selected by an experienced professional, restored to code, and then rented out to suitable tenants.  That is an ideal way to get started in assembling together a portfolio of small apartment buildings.

"Turnkey properties are a great way for an investor individual to get started in the housing market," advised Jerry Cohen, President and Founder of EquityBuild, a real estate investment firm.  "I have been in real estate for decades and a principal in over a thousand transactions.  Over that period, I have hit every pothole and bump in the road.  When you buy a turnkey property as a passive investor, you are learning from my experience and benefiting from my mistakes."

Cohen also added that, "Chicago is a great market for turnkey small apartment buildings.  The real estate market is coming back strong.  Both sales and prices are up in Chicago, which makes small apartment buildings even more attractive.  In terms of being a landlord, remember that even during The Great Recession rents rose in America!"