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When the real estate market cycle starts heading down it's a pretty ugly time. The only news is bad news, people are losing their homes, losing their jobs, there is pain and hardship all round. When the market hits bottom though, activity picks up and investors start flipping houses like mad once they realized values aren't going to drop any more.

However, single family houses are not where the opportunity is. There is nothing wrong with buying single family homes, but they primarily cash generators, not wealth builders.

If you want to take advantage of the real opportunity during this recession you will focus on investing in apartment buildings. That is where true wealth will be achieved for those willing to pursue it.

Compared to single family homes, multi-family or apartment buildings are far superior from in terms of cashflow, but also far lower risk. A quick summary:

1) Cashflow, the main reason we invest in real estate to begin with. Investing in apartments gives you more cashflow simply because there are more families under the one roof generating more rents for you every month.

2) Decreased risk. Almost everyone in real estate investing looks at the big mortgage on an apartment building and immediately equates it with increased risk. What they fail to realize is, that large mortgage, it's payment and all the property's expenses are spread over the incomes of the many people who live in the building, not just a single income of a single tenant as in the case of a single family home.

3) Because of this misconception about risk there is far less competition from other investors when you buy apartment buildings. The big numbers generally make people fearful, and once stricken with fear most investors are unable to think things through to understand the favorable risk/reward ratio a good apartment investment offers. As a result they stick with the familiarity of SFH's.

4) Mult-family investments benefit from economies of scale, which results in lower expenses per unit and higher overall cashflow. The more units in a complex the greater the economies of scale (up to a point), so in larger apartment investments the per unit expenses are lower leaving more income available for you.

5) As a result of the stronger cashflow freed up by economies of scale, the multi-family investor is able to hire a competent, professional property management company to collect rents and manage all other aspects of dealing with tenants and running the property. This allows you to be free of the property and be a true investor.

6) There is a greater reward for the perceived risk of investing in apartment buildings. Because they are at a higher price point than SFH's, more dollars in value are generated in multi-family investments through appreciation. In a market appreciating at 10% per year a $150,000 SFH will go up in value $15,000, whereas a $2,000,000 apartment building in that same market will go up in value $200,000 during the same period of time.

Once the penny drops for you about the leverage you achieve with apartment buildings, and how quickly your wealth grows when you invest in them, you must see the only investing activity that makes sense for a house is to quick flip for cash.

In addition to this, when you observe who the big fish investors are in your market you see they all have sizeable apartment portfolios that form the foundation of their wealth. As Lance Edwards says, "You don't need to graduate from single family to multi-family, you can start building wealth straight away."

If you want establish a family fortune that will grow over time and provide for future generations, apartments are the way to go, and now is the time to do it.