How to provide value in Apartments/Multifamily?

Question

Whatsup Everyone! I am currently based in Saint Louis, I wholesale at the moment, but I am looking to get Involved In 20+ Unit apartments, even 100+.

What are a few ways I could provide value to someone else with a deal?

Also, If I find a deal how do I go about getting with the right people to get it closed?

Essentially I am just trying to find ways to get involved with apartments and provide value that helps make money, because I don't have a ton of capital myself but that shouldn't stop me from achieving what I want.

Thanks guys (P.S. If anyone is in Stl and has a flip opportunity I will buy it)

Jim Sanderson · Answer

Nick,

You are asking a great question, based on providing value, so what are you great at?  Finding a true deal and connecting it to a buyer that can get it across the finish line is of immense value.  Knowing what makes a deal and what doesn't can be a challenge.

Evan Polaski · Answer

Personally, I went the traditional route: I studied business, with a focus on real estate, in college.  And then got a job with a real estate investment company that focused on grocery-anchored shopping centers.  The company owned about 200 centers at the time, was about 200 employees, and focused on raising institutional capital.

But let's look bigger: the founders of that company (Phillips Edison) met while employees at another real estate company (Taubman Companies).

Frank, the co-founders of Ashcroft, worked in asset management for another multifamily syndicator out of college and before founding Ashcroft.  Joe, worked for a marketing company prior to founding Ashcroft.

Bob Nicholls - owner of Monarch Investment Group was a CPA and real estate lender before moving to owning his own company and being on the GP (and the 7th largest MF owner in the world).

Stephen Schwarzman, founder of Blackstone, worked for Lehman Brothers and a smaller asset management company prior to Blackstone.

I don't know what your goals are, so it is hard to say where to start. I picked people that all work incredibly hard.  The founders of Phillips Edison are well into the 9 figure net worth, if not pushing into the billionaire club.  Stephen Schwarzman is ranked as 50th on Forbes richest.  You may not need or want that level of wealth and the work that is required to achieve it.  Bob Nicholls and Monarch, last I heard, was able to raise north of 80mm in equity in 30 minutes for a recent deal.

But, even if you are looking to start doing your own deals: it requires money.  Having a job is a great way to make money, AND qualify for more mortgages.  It also pays you to learn things you very well may not learn otherwise, and it pays you to start building connections that could become investors.  Co-workers, industry groups, lenders, etc.  Depending on your role in any company, but specifically larger real estate companies, you can gain very valuable relationships and a reputation as a high-achiever, that will get you to your goal of being a GP, maybe not faster, but I would argue, you are likely to be setup for a faster trajectory once you get there.

Nick Yates · Answer

I appreciate your response Bob, this biggest thing I Have is Time/Energy, And I want to be a GP on large deals so I am trying focus my energy into activities that can get me into that position(Sourcing deals, Raising capital) and then from there I guess I can take on more day to day activities within the deal as a GP- I am assuming those two things can get me GP Position btw.

Furthermore, I have raised money on a small scale(flips), I have sourced off market single family houses, I have found buyers for deals. that is a good start to being valuable in the marketplace and from what I mentioned above, I think those are some of the same skills to get me where I want in the large multifamily space but obviously just on a bigger scale.

Is there more ways to become a GP on a deal Besides sourcing deals or raising money? Or is that the best use of my time?

Zachary Ware · Answer

I love @Evan Polaski's note on getting into the business. I think this gets glossed over but finding a position in the industry is a great way to learn the skills and meet the network you need!

Evan Polaski · Answer

@Nick Yates, honestly there are lots of ways to add value and be involved.

But, just like wholesaling, it is all about connecting the dots:

There are typically three main components to any deal:

Sourcing a dealSourcing the financing (typically the equity needed)Executing on a business plan

As a wholesaler, the deal and the financing may be easier, since you are effectively playing matchmaker.  This is not to say it is "easy", but at the highest level it is networking and building relationships.

As Bob gets into, if you don't really have any real deals and you don't have a network of investors that would be interested in either partnering on bigger deals and/or becoming an LP in deals, then your value starts to diminish.

Another way to learn the ropes is to get a job with a larger company that operates in that space.  Anything from property management to construction superintendent, or underwriting analyst, etc.  Some companies are great at providing all roles exposure throughout the company to learn more about real estate investing than just the specific role you are working.

Bob Stevens · Answer

Providing value its what its all about, So what value do you bring? Do you have deals, money, buyers, sellers ? If not of the above, then tell me/ us what value you provide ?

How to provide value in Apartments/Multifamily?

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