Philadelphia, PA · Member since 2018 · 57 posts · 22 votes
Hello everyone! I’m looking to venture into real-estate. I currently have no experience at all. I live in NJ and I want to dive right into multi family buildings. Any pointers on how to get started? Should I start small? Any information from anyone would help. Thanks so much guys!
Investor · Phoenix, AZ · Member since 2017 · 583 posts · 919 votes
7y
@Quinyana Mosley you don't have to start small. When I started looking into multifamily, I went right for the big stuff because it had the type of management structure I wanted (on-site personnel).
You're going to need to spend a few months learning first, though. Listen to every BP Podcast on Multifamily. Read the books they mention at the end. This will give you the foundation you need to start having conversations with people in the industry. Then I'd start going to seminars, conferences, and workshops on multifamily investing. There are plenty of them all over the country.
Lender · Newark, NJ · Member since 2016 · 695 posts · 252 votes
7y
Network Network Network. Go to a lot of meetups in your area and network. Save up for a down payment and use an FHA to buy your first multifamily and you can live in rent free. this will help you save up for your next property. I just moved to NJ last year when I bought my first 3 family owner occupied, i'm getting ready to close on my 2nd investment property. If you have any questions you can pm me.
@Quinyana Mosley try and analyze a property or two a day in the area that you are looking in. By doing this, when you're ready to send out a LOI you'll know what a good deal looks like. Furthermore, this gets you comfortable with looking at the numbers and puts a microscope on the things you're not extremely familiar with. This has helped me out a ton as I am just starting too. Best of Luck!
Real Estate Agent · Westcheser, NY · Member since 2017 · 66 posts · 22 votes
7y
@Quinyana Mosley
Hi Quintyana I’m also a newbi , my wife and I purchase a 4 family house around 4 months ago in westChester New York , I’n our short investing career , and with my limited knowledge I can advise you to really start learning your market, you have to know everything about what market you want to invest it for example “how much is average sq foot going for” what are the rents like”
Extra extra
Also before we actually purchase a property , we study study study everything about the realstate strategy that we want to follow.
Any questions please don’t hesitate to ask,
Investor · New York City, NY · Member since 2015 · 388 posts · 563 votes
7y
Hi @Quinyana Mosley - we've all been there. It's an exciting place to be- you're standing at the precipice of what could be a long and prosperous path. Will you dive in, when so many before you have allowed their fears to determine their futures?
More practically, I suggest burnishing your credit until it sparkles, paying off high-interest consumer debt(if you have any,) reading and listening to podcasts(and definitely avoiding the high-priced 'guru' classes,) and saving up for a downpayment. You'll often hear about no-money down real estate. While it's possible to do that, I consider it the exception rather than the rule. As you gain experience and connections, you'll be more likely to find no-money down deals, but early on, a low downpayment loan from Fannie(or Freddie?) on an owner-occupied multifamily would likely be a smarter and easier path towards achieving your goals.
Yonkers, NY · Member since 2018 · 46 posts · 6 votes
7y
@Quinyana Mosley I’m new to this also. My best advice being new is to go look at properties . I have looked at my first 3 and learned soo much. The 2nd house I saw I went with out my contractor and couldnt estimate cost correctly and by the time he came house was already In contract :( So make sure you walk the property with some one who can estimate cost so you can put in offer sooner then later. 70% rule of thumb when your looking. And I’m looking upstate NY but open networking and checking NJ
@Quinyana Mosley
BP has a lot of free ebooks available as well. Everything from deal analysis to tenant screening. I'm also just getting started and learning all I can to make my first purchase in the next 7/8 months! Good luck to you!
Philadelphia, PA · Member since 2018 · 57 posts · 22 votes
7y
@Sam Shueh Absolutely! If I feel like it’s not for me I’ll definitely back off and not waste my time. My plan is to start off small and we’ll see how it goes from there. Thank you!
I am actually going through the underwriting process for a Small Multiunit Property that I plan to live in (House Hacking) as I type this. Once you know what to look for, the process becomes much easier. So, here are a few bullet points to get you going.
1. Educate yourself by talking to people who have done it; actually done it and ask them what they would have done differently.
2. Educate yourself even more: Bigger Pockets has a wealth of information along with other books out there. The library is your most economical friend...free
3. Understand the Finance lingo: Cash Flow, Appreciation, Tax Savings, Loan Paydown, Basis, Income (all), Expenses (taxes, insurance, vacancy, maintenance, etc.), Capital Expenditures, Depreciation, Net Operating Income, Capitalization Rate, Fair Market Value, Fair Market Rent, Debt Service, Earnest Money, etc.
4. How do you plan to gather the down payment for the property, FHA, Conventional or VA? Don't forget about calculating fees: Inspector, Attorney, Appraiser, Closing Costs. Can you move in with a relative, pay a portion of their rent or mortgage, save the difference for a down payment. Can you borrow from a 401K, 403b or some other asset that you already have? Get a pre-approval letter!!!
5. Find a investment calculator for multifamily and run the numbers: Mortgage, Insurance, Taxes, Garbage, Water, Sewer, etc. Research your city's website regarding the numbers and just plug them into the calculator. Do the numbers work? If you don't understand the numbers, more reading.
6. Return to step one.
7. Don't get taken advantage of. Be clear in your questioning and get logical answers to your questions.
8. Create a 5, 10, 15 year plan and exit strategy. Ask yourself what is your end goal...Retirement, buy and hold.
9. View a few units to see what the standard is for the area: stove, dishwasher, range, forced air, boiler, etc. You'll begin to see a pattern.
10. Submit an offer...See page 193, The Book on Rental Property Investing by Brandon Turner. This is your business, run it as such with the diligence that it deserves.
Lastly, above is what came to mind. I'm sure there is much more. Educating yourself is the best tool you can arm yourself with. Good luck.
Rental Property Investor · Clinton, CT · Member since 2017 · 29 posts · 37 votes
7y
@Quinyana Mosley my advise to you would be to figure out your WHY. What is motivating you and how would you like your real estate investing to fit into your life? Work with the end in mind.
I think someone once said “if you don’t work a plan, the plan will work you”.
Secondly get extremely comfortable with your numbers. I did not buy my first property until after running numbers on over 100 properties. Trust me at first this seems overwhelming but it’s well worth it so you buy right. I would suggest picking an area you want to invest in and start running numbers on every property for sale. You will start to pick up on trends and have a better understanding of your market.
Happy to help further if I can.
Good luck!
Rental Property Investor · Jamaica, NY · Member since 2018 · 51 posts · 7 votes
7y
@Quinyana Mosley, I am started 4 months now you will need to learn how to analyze deal, get an agent, have your finance ready, find home an inspector and a Property Manager. You can watch Brandon Turner YouTube videos, connect with persons on BP who are doing the same thing than you want to do. That’s what I did and now I’m under contract for a property since yesterday.
Investor · Atlanta, GA · Member since 2016 · 241 posts · 86 votes
7y
@Quinyana Mosley I am in the same boat. I can just you what I am doing. I am learning all I can about the aspect of the business.
Tapping into sources to find deals. Reaching out to brokers. Researching property owners and contacting them. Network with people who have done deals. Learning how to underwrite deals. Networking with equity partners. I do this every day.
One thing I have noticed is that the market is highly competitive right now and a lot of properties offered the market don't pencil for us. So for me, I know that it's going to take a lot of prospecting before finding a winner.
@Quinyana Mosley I am in a similar position, along with many others in this thread as well. Best of luck to you! What areas of NJ are you looking into?
Investor · Frisco, TX · Member since 2015 · 84 posts · 52 votes
7y
When doing Multifamily, partners and mentors are a critical element to success. You can "learn the hard (expensive) way" or spend some time and money on a good mentor. Like everything out there, do your research when selecting a mentor. There are lots of gurus who "talk a good game", but can't deliver. After I did my research, I selected @Brad Sumrok as my mentor. Money well spent and I have been successful in my multifamily investing journey.
North Dartmouth, MA · Member since 2018 · 45 posts · 6 votes
7y
I just purchased my first 3 family. Purchase price $160k, rents $2,250, 30yr fixed fannie @ $721/mo. I had to put 25% down which I used from my home equity line. Technically I didn't use my own money because its all borrowed money. I don't know if this was the best way to get the property but I am in the game now. I have to put in around $7,000 to get property up to my standards. This is mostly for the exterior (new doors, porches, basement windows to secure property) (previous landlord did very little on this)
I had all tenants sign a new Rental Agreement with me. So far so good. Now I just have to build up some cash for my next multi. I would love to do no money down purchase but am not to sure how yet. So the 25% seemed like the only option for me to get in.
The scary part was the closing process because at that point, this was Real! Once I progressed through the fear and doubt, it all started to make sense again. I think this is a feeling most newbies go through.
But my point is (after the reading/researching and questioning) you just have to do it! Good luck!
Flipper/Rehabber · Nashville, TN · Member since 2018 · 8 posts · 4 votes
7y
I've worked on many smaller multi-family deals, and done valuation for larger 700+ unit packages in the past. For any first time investor, I always recommend learning the fundamentals of discounted cash flow analysis. Even if you decide to use a different valuation method, doing a DCF analysis helps you think through all of your requirements for the transaction, and makes you think about the assumptions you're making in terms of the market, and your costs. Going through the process also familiarizes you with IRR and NPV. You can also use it to prove profitability after your holding period, so it's a valuable tool on both sides of a transaction.