Large Multifamily Property Difficulty

[Billy C.]

Hi everyone,

I am new to this community and look forward to learning as well as offering my opinion where I can. I made the decision to get involved with real estate investing because the amount of opportunities are endless and I enjoy increasing productivity and efficiency. I feel intimidated, but I feel this is normal. This is compounded by the fact that I have no experience with a mortgage. I have gained knowledge from a few of the BiggerPockets books, but I realize I have only dipped my foot into the waters of real estate investment.

As of right now, I would like to look further into large multifamily properties (50+units) because I think there is more potential and that type of dynamic may fit my personality better. I will be reading some books specific to this investment type, but know that experience is the best teacher.

I am wondering if I am being too optimistic and perhaps overconfident in my abilities to be even thinking about pursuing a large multifamily property right now?

Meeting you all has been my pleasure and I appreciate any thoughts you may have. Thank you.

[Brian Geiger]

The one thing that you need to do before you even look at apartments is to get EDUCATED!!!!!! The terminology isn't the same in SFH and you need to know how analyze properties to see if you have a good deal or not. A partner may help but you don't want to be a free rider and not contribute anything to the partnership. Partnerships work best when both people are contributing something of value to the business. So here is what I would recommend you do.

Ask yourself this question: What type of business do I want to run in Apartments? There many type of business and so you need to find out which one work for you and most importantly do I want to involve investors in the deal? If so, you will need a securities attorney on your team.

The next question you want to ask is what type of apartments am I looking for? 

Class A, B, C, D. 

Then you want to ask your self the business play that you want to do:

1. Turnkey

2. Value-Add

3. Distressed

Finally you want to determine your financial metrics that you want to target that will be comfortable to you and your investors. Here are some example metrics:

1. Cash on Cash Return

2. Internal Rate of Return

3. Equity Multiple

This is not an exhaustive list but it is a start.

What you want to do is create a brand. You should start a meetup in your area, attend other RE meetups and listen to podcasts.

Here are five podcast I recommend:

1. MFIN Podcast: Dan Handford

2. Lifetime Cashflow: Rod Khleif

3. The Apartment Syndication Show: Whitney Sewell

4. Cash flow Ninja

5. Old Capital Podcast

You should also read some books on the topic. Here are 5 books I recommend:

1. Wheelbarrow Profits: Jake & Gino

2. Lifetime Cash flow: Rod Khleif

3. Raising Private Capital: Hunter Thompson 

4. Multifamily Millions: David Lindahl

5. The Best Syndication Book Ever: Joe Fairless and Theo Hicks.

I hope this helps. Please PM if you need further guidance.