Don't be influenced by another offer coming in on the property, because as I've said the majority of the time, that other offer for whatever reason will not be as competitive as yours and will not work out. Time and time again I've seen this tactic used and most of the time it's been sincere. Most of the time when there's multiple offers on the properties, there really are multiple offers, with more than one investor interested.

Don't get emotionally involved with the property. When making the offer, don't get too emotionally involved. Later on in this manual, I'm going to talk about negotiation; however, it bears mentioning right now that you don't want to get too emotionally involved in a property. If it's a good opportunity, you'll want to try to take as advantage of it as aggressively as you can, but not go overboard.

NOI stands for Net Operating Income. Out of all of the numbers you see on an apartment property, this is by far the most important number. This is where the rubber meets the road. This is where you are going to decide whether this is a profitable or non-profitable property, by the net operating income. Not only does this give you a barometer for value, but also gives you a barometer of cash flow, and a barometer of how high you can make that cash flow become over the next 1, 2, 3 to 5 years.

Of course, there will come a time when you are going to want to make an offer on a property. Remember, this is where a good broker is worth their weight in gold; how they can direct you as far as price, how to structure the offer, terms, etc. This of course is very, very important. However, we are going to specifically deal with apartment properties so I'm going to give you some do's and don'ts when it comes to preparing the offer that you may want to keep in mind.

Many people when they look at an office building don't even consider looking at the whole building in and of itself. Why? Because many people feel that office-building tenants take much better care of the spaces that they occupy versus say people that occupy apartments. Nothing could be further than the truth. Make sure that you inspect the entire property at least one time before closing, preferably twice.

Many times you'll be able to get a tax and or repair or maintenance credit at closing from the seller of the apartment property. For example, in Iowa, if you buy a property at a certain period of time, you could get up to one year of property tax credited to you at the closing table - a large savings! Also, in the event that there's repair and maintenance costs that need to be done, you can have that credited to you at closing as well, further reducing your down payment.

These are the seven mistakes you must absolutely avoid when you purchase an apartment property. Making any one of these mistakes will cost you literally thousands of dollars at the closing table when you buy. Here they are: Not putting yourself in the buyer's shoes 5, 10, 15, or even 20 years down the road when you buy your apartment property. You almost want to buy the property over again in your mind say 10 years down the road and ask yourself the following question: Based on the future of the location and condition of the property, will a buyer find this property attractive? If you hesitate on saying yes, you must definitely do more analysis as to the salability of the property and the area.

No matter where you go, whether it's small towns or large cities, more than likely you're going to run into office buildings; both small and large. Most people's experience with office buildings is doing business there. For example, going there to transact business with some one in some way, whether it's your insurance guy, financial planner, doctor, etc.

A Gross lease is a gross lease is a lease in which you as the owner pay most or all of the expenses. In a gross lease, you are responsible for paying the property taxes, insurance, and the maintenance of the building. That is your responsibility. It's similar to a lease you would have with an apartment property. Usually when you own an apartment building, when the tenant pays you rent, you take a part of that rent to pay your share of taxes, insurance, maintenance, etc.

Investment real estate values really come down to the income stream a property produces and office buildings are no exception. What appraisers do is compare income streams that properties produce versus comparing bricks, mortar, wood, etc. They do use three kinds of methods to value property: the comparable approach, the cost approach, and the income approach.

In the event that the US economy does enter into a period of sustained weakness, commercial property vacancies would likely rise, which would have a depressing effect on rents. Should this adverse scenario be realized, real estate capitalization rates could rise and values could fall, and investment in real estate investment would most likely drop off.