Looking to get into multi fam investing - Need experience!

[Account Closed]

Hello Bigger Pockets Fam! 

I'm excited to be on here with fellow REI's! I'm looking for a little bit of advice right now and wanted to put it out there!

I’m 30 and work in professional sales, I make decent income and have a little over a quarter million invested in the S&P 500 right now. I’ve always been drawn to multi family real estate but never pursued it.. however a few months ago I got really into educating myself on it all. I read “Crushing it in Apartments”, “Multi Family Millionaire 1&2” , “The Real Book Of RE”, and also did a course from Grant Cardone! 

I even re read the “Multi fam millionaire 1&2” and took notes my second round. Needless to say, I have a lot of information and I have the processes sort of outlined - literally hundreds of pages of notes - but I only have book knowledge which is my problem. I don’t have any real experience actually dealing with banks for financing or looking at real OM’s or seller documentation or actually underwriting a multi family … so I’m really not familiar with any of this stuff other than just the text instructions, you can say. 

I’m trying to narrow down a plan and process of what to focus on and learn how to do and I feel the most important thing for me to learn is how to actually underwrite a real deal with real documentation opposed to just reading about it. I want to practice this over and over again but I don’t know how to acquire this info other than actually speaking with brokers etc.. is there a better way to do this for practice ? 

I’m ideally wanting to get a 16 unit C class apartment and value add but again I’m lacking all the experience on this and I’m 100% not comfortable underwriting deals until I’ve done it numerous times so I’m just wondering what you’d think I should do to acquire this knowledge? Are there practice sites for this type of stuff or what? 

Thanks again! Kind wishes! 

[Nathan Gesner]

Welcome to the BiggerPockets forums!

It sounds like you're over-analyzing it and you've paralyzed yourself with fear.

What happens if you save up $50,000 to invest in a single-family home, it turns out the entire transaction was a scam, and you lose the $50,000? Do you die? Does someone take your kids, freeze your bank accounts, fire you from your job, or throw you in prison? Of course not! You lose the $50,000 but your life goes on and you'll be more wary of scams in the future. 

Real estate is a very forgiving investment vehicle. People from the 70's and 80's didn't have BiggerPockets, hundreds of books on investing, calculators with graphs and charts, or any of the fancy tools we have today. They saved up money, bought a nice house in a nice neighborhood, and they rented it out for a couple decades. They made mistakes, learned along the way, and held on to the investment knowing it would produce a profit. 30 years later, they're millionaires without any formal education or hundreds of pages of notes.

Have you ever jumped off a tall bridge or cliff? I used to spend my summers jumping off cliffs and bridges in Oregon with heights of 30-70 feet. When a new person shows up to try jumping for the first time, they are often paralyzed. They stare at the water forever, hoping their fear will go away or someone will give them a secret that guarantees they will be successful and safe. The truth is they just need to jump! Once they jump in from a 20- or 30-footer, they'll realize it's not going to kill them and they can enjoy themselves. Same concept.

There's nothing wrong with educating yourself and making better choices from the start, but you're taking notes as if some magic formula will suddenly appear and make real estate investing a simple, fool-proof process. The truth is, you need enough information to understand the general concepts, you need some money saved up, and then you need to jump in! You'll get through the first deal and realize you've been wasting time looking for the answer when action was what you needed. You'll refine your education and ability from there.

If you can't get off the pot, look for an investor group and find someone willing to let you shadow them. You'll find most investors are not sophisticated people with secret formulas hidden from the public. We save money, find a solid property in a market we believe in, buy it, then do our best to manage it well. Hold on long enough and time will erase your mistakes.