Wholesaler · Chicago, IL · Member since 2018 · 84 posts · 84 votes
My five-year goal is to have a portfolio of mid to large multiunit properties. What should I do to prepare myself now to get into these types of deals in the future? I've found a mentor that does single family and small multi-unit fix and flips and am in the middle of my first deals with him. In return for his guidance, other than providing cash, I'm helping him grow his/our business. Is this the right starting point?
Hey @Mike Kehoe I think that is a great starting point.
I would say be cautious, when you have cash on hand and you mix it with the excitement that all investors get when starting out, it's easy to get into bad deals and bad partnerships. There are always people who will look to take advantage of your inexperience and your money.
It sounds like you are already headed in the right direction. You may want to think about diversifying both your money and your education across a few different deals and with a few different sponsors. In my experience it has been very beneficial to see how a number of people operate.
Spread your time out by adding value to two or three different individuals. Spread your money out by partnering or investing in two or three different deals with two or three different deal sponsors.
This is definitely a longer term process, but with the 5 year mindset that you mentioned you have, this is a realistic strategy to equip yourself in the right way in order to move yourself to where you want to be five years from now.
Hey @Mike Kehoe I think that is a great starting point.
I would say be cautious, when you have cash on hand and you mix it with the excitement that all investors get when starting out, it's easy to get into bad deals and bad partnerships. There are always people who will look to take advantage of your inexperience and your money.
It sounds like you are already headed in the right direction. You may want to think about diversifying both your money and your education across a few different deals and with a few different sponsors. In my experience it has been very beneficial to see how a number of people operate.
Spread your time out by adding value to two or three different individuals. Spread your money out by partnering or investing in two or three different deals with two or three different deal sponsors.
This is definitely a longer term process, but with the 5 year mindset that you mentioned you have, this is a realistic strategy to equip yourself in the right way in order to move yourself to where you want to be five years from now.
What you describe sounds like an excellent plan, @Mike Kehoe . I would also recommend focusing on strengthening your personal balance sheet and income statement in preparation for starting to network with local (to where you are going to be investing) commercial lenders. You'll need to line them up prior to getting your first commercial loan, which can be quite difficult without any prior track record.
Hope you're enjoying the weather in the Windy City. Keep bundled up and stay safe. Best wishes and continued success!
Hey @Mike Kehoe I think that is a great starting point.
I would say be cautious, when you have cash on hand and you mix it with the excitement that all investors get when starting out, it's easy to get into bad deals and bad partnerships. There are always people who will look to take advantage of your inexperience and your money.
It sounds like you are already headed in the right direction. You may want to think about diversifying both your money and your education across a few different deals and with a few different sponsors. In my experience it has been very beneficial to see how a number of people operate.
Spread your time out by adding value to two or three different individuals. Spread your money out by partnering or investing in two or three different deals with two or three different deal sponsors.
This is definitely a longer term process, but with the 5 year mindset that you mentioned you have, this is a realistic strategy to equip yourself in the right way in order to move yourself to where you want to be five years from now.
Excellent advice. I think my intuition was leading me in that direction. I just need to listen to it.
What you describe sounds like an excellent plan, @Mike Kehoe . I would also recommend focusing on strengthening your personal balance sheet and income statement in preparation for starting to network with local (to where you are going to be investing) commercial lenders. You'll need to line them up prior to getting your first commercial loan, which can be quite difficult without any prior track record.
Hope you're enjoying the weather in the Windy City. Keep bundled up and stay safe. Best wishes and continued success!
Thanks, Dave. Preparing for commercial lending has been a topic that I've been thinking about. I appreciate your guidance!
I would say hold the cash and wait until the market turns, my dads says it best opportunity usually comes when there is blood in the water, if anything I would consider financing a duplex with a portion of that money down, but I wouldn’t get into any fix and flips right now, especially knowing that you could potentially buy those same properties for cents on the dollar in the near future, I know of a few duplexes in the heart of Tempe that are currently for sale but in my opinion they are a bit overpriced based on the Roi but let’s talk if your interested,
I think you are doing good by partnering. Also consider investing in syndications & JV opportunities for longer hold plays outside of just the constant flip.