Where the Real Estate Deals Are: Apartments

Sure, the real estate market is in the tank. Mortgage brokers are going back to school to become nurses, and realtors are pounding the pavement selling Avon. Believe it.

Meanwhile, in little dark corners at Starbucks around the U.S., it's not hard to find two, three or more people flipping through Web pages of apartment buildings for sale and speaking discreetly into their phones.

"For people who can buy, there are some real bargains out there in multifamily buildings," says Dean Wegner, a realtor and chairman of the Independent Rental Owner's Council of Phoenix, Ariz. "It's a once-in-a-lifetime opportunity. We're seeing people come together in partnerships to buy apartment buildings that never would have a few years ago."

Becoming the owner of a multifamily building is not a small step. Most investors buying rental property start small with a home or condo. If that goes well, they move on to the bigger fish. But some recommend that starting off big is the way to go.

"Let's say you buy a house to rent and, after research, you figure that you'll be making $250 per month after mortgage and expenses," says David Smith, a Chicago-area real estate agent. "What if you bought a four-unit property up the street instead? They'd each rent for less and your mortgage would be higher, but your expenses per unit would likely drop and your overall monthly net profit is likely to be higher."

So is owning an apartment building for you? Here are some guidelines to look at before jumping in.