How Can My 1st RE Investment be in Multifamily/Apartments?

[Hubert Washington]

BP Community,

I would like to receive input from those in the community who have more experience than I do. First a little background on me. I am new to real estate investing and BP. I started my journey a little over a month ago when I came to the realization that investing in real estate was going to be key to achieving financial freedom. In the last month I have read and listened to anything and everything I can get my hands on. I stumbled onto the world of multifamily investing by mistake and instantly knew that this is where I wanted to be. I have since focused my energy strictly on multifamily and have l have learned a lot of the foundations of investing in MF. So that brings me to my question:

How can I make my first ever investment in real estate be in multifamily/apartments? 

I ask the question "How can" because I know that this is what starts the process in my mind in figuring out how to solve the problem and make it a reality. In my research, I have come across many who say that "you can't jump directly into multifamily", "you have to start with SF and work your way up", "no one will take you seriously since you don't have any experience in MF". However, I have chosen to reject this line of thinking and am focusing on instead how to make this a reality. I am not naive. I understand that capital, experience, net worth, and liquidity are all factors for securing investors and financing. I have 1) saved up over $100k that I am looking to start with, 2) family who are interested in contributing to the right opportunity, 3) a six figure income and 750+ credit score (I understand this is not as important on the multifamily side of things) and 4) a burning desire to make this happen.

Knowing that there so many of you out there that are further down the road than I am and have infinitely more experience than I do, I am requesting the assistance of the BP community to help me answer the question "How can I make my first investment in real estate be in multifamily/apartments?" Again, I've already heard from the people who say that it CAN'T be done. Now I want to hear from those say that it CAN be done. I hope that the responses on this post will be encouraging to anyone else out there who is looking to get started in multifamily. Thank you in advance for all of your valuable wisdom.

[Mike Sedlacek]

You guys are something else. When I graduated college at the age of 22 I didn't want to move back to my folks house so the first thing I did was to look for a property that I could buy and move into. I didn't think about being afraid to buy something I  just knew I needed to get out of my folks house. That was a very strong motivation for me. I didn't read any books or view any seminars. There weren't any back in the late 70's. I just started driving around the city and I stopped at buildings that it seemed needed work at I knocked on doors to get info about the owners. Then I started calling them. I had $5,000 to put down, a new full time job that paid me $25,000 annually with less than 2 months on the job. I couldn't get financing as of yet from a bank so all I had left was to find an owner willing to finance me. I found a six family building that was old and in need of repairs. I talked to the owner who was an elderly gentlemen that couldn't keep up with repairs and was willing to talk to me about purchasing his building.  With careful negotiations I promised him I would take good care of the property with his supervision and asked him to finance me for 5 years on a balloon payment and with the option of renewing the owner finance loan for another 5 years. It all worked out and this was the beginning of my investment path. Not that hard to do. During the next 20 years I had purchased a 5 family, 8 family, three 4 family buildings, a 12 family, three single family buildings, and a 50 unit mobile home park on 50 acres of land. Then I teamed up with my 2 brothers and sister and we purchase 7 buildings with a total of 200 rental units and a vacation home in Palm Bay, Fl. 

My advice is, find a property, work the numbers and take the plunge. Once you get started there is the excitement to keep going. Good luck.