How do I cut my teeth in mid-size Multi-Family investing?

[Paul Charbonneau]

I started investing in single family homes in November of 2019 and have grown my portfolio to 19 doors. I own one duplex and I am looking at some quads and a 6-unit property. However, I am interested in learning the process of finding, evaluating, negotiating, financing, rehabbing, and operating a larger property (75 -150 units). I have heard of mentors and I believe that will be invaluable when I am ready to buy my first commercial property. However, before I do that, I was wondering if anyone has heard of a shadow program or internship where a seasoned veteran is willing to show you the steps they take as they go through a live deal. Or, if a live, real-time internship is not feasible or realistic, are there any videos that you would suggest that walk you through the process? 

[Evan Polaski]

@Paul Charbonneau, generally speaking you will be hiring a management company anyways.  Not just because there are a lot of moving parts that you cannot manage yourself, but also lenders will require experienced, professional management just to secure the loan.

Sourcing: talk to brokers, owners, network, network.  

Evaluating: depends on business plan, but sounds like you are seeking value add.  It is generally the same: understand in-place rents, market rents on current condition, and port renovation rents.  Vacancy.  Other revenue options: reserved parking, washer/dryer rents, etc, RUBS, etc.  Understand inplace expenses and rely on PM input for a stabilized budget.  Reassess your insurance and tax rates.

Understand capex costs and get healthy budgets to handle rehabs and contingencies.  Assess the supply and demand in the market/submarket.  Income levels of tenants and market, housing prices, school districts and crime rates.

Rehabbing: find a manager that handles construction too.

Operating: you are now an asset manager.  You are monitoring operations, and execution of business plan.  You are solving problems: keeping renovation costs down without hurting rents, mapping out plans for underperforming units, weighing in with marketing ideas, and generally allocating capital accordingly.

I don't know of any real shadow programs, but at a very high level, operating a larger property is no different than smaller ones.  Have a plan to drive revenue, keep expenses controlled and stay focused.  I hear fairly regularly that groups/people running bigger deals run into issues, because they seemingly lose focus on the operations.  Asset management is different than property management.  It is more proactive versus reactive, and I think there are some that make the transition that are waiting to react, and therefore assume that the manager is doing things correctly because they aren't calling.  The asset manager needs to be proactive with the property manager, and make sure they are monitoring occupancy, leasing activity, construction progress, etc.