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Ep. 176 - 7 Reasons You Should Not Buy an Apartment Complex as a New Real Estate Investor

Episode #176

Are apartment complexes really the golden ticket to financial freedom, or could they actually be a trap for new real estate investors?

 

In this episode, Ashton breaks down why apartment complexes may not be the best starting point for new real estate investors. He shares the hard-earned lessons from his own experience, explaining the cash flow challenges, management pitfalls, and investor relations struggles that often plague beginners in the syndication business. Ashton also contrasts apartment syndications with vacation rentals, like Airbnbs, as a more viable path for achieving financial freedom faster. If you're new to real estate, this episode will reshape how you approach your investments and guide you toward smarter choices.

 

 

[00:01 - 04:16] Why Apartment Complexes Aren’t the Easy Win

  • Apartment complexes don’t provide immediate cash flow for the first few years
  • New investors often underestimate the time and effort required
  • Syndication typically benefits experienced investors with more resources

 

[04:17 - 08:50] Cash Flow Challenges in Apartment Syndication

  • Syndicators rely on acquisition fees to stay afloat, not property cash flow
  • You’re constantly chasing deals to maintain income, creating a “hamster wheel.”
  • Without careful planning, you could end up with properties that don’t perform

 

[08:51 - 13:33] Investor Relations: The Underrated Job

  • Managing investor relations is a critical but often overlooked aspect of syndication
  • Keeping investors informed and satisfied requires significant time and effort
  • Failure to maintain relationships can damage your reputation and future investments

 

[13:34 - 18:23] Legal Fees and Structuring Syndications

  • Legal fees for setting up syndications are higher than most anticipate
  • You need a network of accredited investors or risk being unable to raise capital
  • The wrong structure can limit who can invest in your deal

 

[18:24 - 23:35] Airbnbs as a Better Starting Point

  • Airbnbs offer immediate cash flow with minimal management
  • Ashton replaced his $200k income with just five Airbnbs
  • Airbnb rentals provide the freedom and income needed to invest in larger projects later

 

 

Connect with Ashton!

Website: Valkere Investment Group

LinkedIn: Valkere Investment Group

 

 

Want to learn more about creating multiple streams of income, wealth protection, financial freedom, or real estate investing? Join our investor club, check out our blog, get our free ebook on investing, or join us for our monthly Real Estate Investing Made Simple virtual meetup. Take the first to your wins in life and head on to http://www.valkeregroup.com.

 

 

 

Key Quotes:

 

"If you're suffering, the business is suffering, and if the business is suffering, you're going to be losing money and investors." - Ashton Levarek

 

"You have to decide if you want bragging rights or real cash flow. Many people get stuck chasing status, and that doesn't pay the bills." - Ashton Levarek