Best methods for starting out in Multi-family

[Bradley R Stillabower]

I'm just a few weeks into the 6-12 months I'm giving myself to get educated on REI before I have access to capital and start making decisions and (potentially) taking action.

Generally, I plan to 

- spend most of my time being very diligent and involved in front-end analysis of deals, while 

- being minimally-involved (passive) in the back-end property management.  

So I'm mostly being drawn to multi-family properties, buy-and-hold, starting with small residential properties for the first 3-5 years (starting with a house-hack for my daughter, and potentially another for my recently-widowed MIL), and after a few more small residential properties then maybe scale slightly to a couple small apartment properties.  In total, an initial acquisition phase for 5-8 years, followed by up to 10 years of debt paydown, then free-and-clear retirement cash-flow before finally passing it all down to the kids and/or (future) grandkids to enjoy/deploy/sustain/grow the equity to good use.

My question is:  what is best method(s) (for me) to start with (in sequence or in parallel) for the first few properties/deals:

A.  passively invest in a syndication deal(s)

B.  purchase from a complete turnkey provider

C.  a turnkey purchase but self-manage for a period of time

D.  a hands-on "manual" purchase:  find an agent/broker/lender team and do the deal hunting/analysis directly with them

Keeping in mind I'll be working a full-time W2 job in the meantime, at least for the next 4-7 years before retirement at age ~60-63.

Thank you, appreciate any insights

Brad

[Jacob Haskins]

Hi, Brad.  Best of luck on your first deal!  I would recommend networking and using the "D" method as you have stated below. Below are a few thought to why I think this might be best:

A. You can absolutely invest in syndication, but if you want to hand it down to the kids/grandkids, this will look a little different because you won't own/control the actual asset.

B + C. Everybody wants a turnkey property that has good cash flow and equity appreciation.  You could do this yes, but it is harder to scale (in my opinion).  I also don't always trust the face value of the analytics for turnkey properties, make sure you run the numbers yourself!

D. Building a team in the long run is so important.  Not to mention if you are able to "manually" find a property and build a team around you to manage your portfolio and grow.  Also the best deals will be the ones you go out and find yourself whether it be wholesalers, off market, or other.  In addition, I always trust my own analysis anyways compared to the numbers of what some "turn key" properties may boast.   

In general, real estate can be as passive or as manual as you would like.  I personally like to be hands-on in my investments and learn the ropes through analytics, property management, and deal finding.  This is just my 2 cents!