Looking for advice on EXPERIENCE

OP

Member since 2019 · 22 posts · 6 votes

6y

@Aaron K. That's a great point and I have to keep reminding myself that plans/situation may very well change over the years. I am definitely open to the idea of keeping my future investments long-term and abandoning the apartment idea if they are lucrative enough. I think what attracts me to the apartment complex is that it consists of many homes in one location...seems less of a headache than dealing with dozens of SFHs spread out.

Aaron K.

Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes

6y

@Account Closed it may be easier to manage but considering what you make at your day job are you really going to self manage and be available at all hours to fix broken toilets anyway?

OP

Member since 2019 · 22 posts · 6 votes

6y

@aaron

@Aaron K.i hear you, but the plan would be to have a property management company take care of the day to day issues.

Aaron K.

Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes

6y

@Account Closed if you plan on hiring out management anyway the benefit of the apartment complex is slightly diminished, you limit your purchasing options to make someone else's job easier. You do still get the benefits of only paintng one exterior or replacing one roof but that is about it.

OP

Member since 2019 · 22 posts · 6 votes

6y

@Aaron K.I realize that hiring out a company would take away from profits, but how will it limit my purchasing options?

Enrique Huerta

Investor · Los Angeles, CA · Member since 2015 · 213 posts · 162 votes

6y

My question is what are some RE investment opportunities that will 1) provide experience that will be beneficial towards my goal of owning an apartment complex,

Investing in passive syndications if you are an accredited investor or investing in crowdfunding platforms that cater to retail investors. By reviewing the deals from these sources, you can start to see how various sponsors underwrite and acquire investment properties across the country. You can build a diversified portfolio by acquiring minimum investment interests with different sponsors and geographies.

and 2) keep my investment liquid enough to cash out when the time comes for the big purchase.

This is challenging. Real estate is not a liquid investment. Even with the crowdfunding sites, there's not a major secondary market so your capital is tied up for the life of the project (3-5+ year hold period). It's just the nature of the beast.

One recommendation that someone else posted is to start smaller. Rather than wait a decade to save $1M, buy a smaller apartment building now (2-4 units is residential and 5-20 would be commercial). In Montana, I imagine you can buy some decent real estate with less capital than $1M in savings. You can also look for deals and partner with someone to do a JV where you will learn a lot from that individual and get some profits but not be responsible for the entire capital investment or financing portion of the deal.

The possibilities are endless and people have done more with less. With your income and motivation, you can definitely be in a real estate investment by the end of this year and not this decade. Let me know if you have any specific questions.

3 Reply

Mark Allen Kenny

Investor · New York City, NY · Member since 2016 · 155 posts · 105 votes

6y

@Account Closed One of the best ways to learn is to partner with others. If you're looking to purchase an apartment building on your own, I would suggest investing as an LP in syndications. You can invest as little as $25K or $50K and learn a great deal about asset management, cash flow, investor relations, etc.

OP

Member since 2019 · 22 posts · 6 votes

6y

@Enrique Huerta this is really great - just what I was looking for. You've given me a lot to think about and now I've got some homework to do. Thank you.

Aaron K.

Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes

6y

@Account Closed it isn't the management that limits your purchase options, but if you focus solely on an apartment complex you are limiting your own options primarily for the benefit of your property manager without any financial reasoning to back it up, thus why you should remain flexible and go where the numbers take you.

OP

Member since 2019 · 22 posts · 6 votes

6y

@Mark Allen Kenny i agree completely. I need to progress from book knowledge to real world experience and one of the best ways to do that would be finding a partner. I will look into LP syndications, thanks for the tip!

OP

Member since 2019 · 22 posts · 6 votes

6y

@Aaron K.I see what you're saying. Yes, makes perfect sense. I will try to be flexible with my plan and you've made a solid point about not waiting a decade to really start investing. Thank you for your input!

Greg Dickerson

Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes

6y

Originally posted by @Account Closed:

Hi Everyone!

Long time lurker, first time posting.

I’m 29 and my wife and I have a household income of around 200k. Our plan is to pay off our student loans then save up for an investment property. Currently the plan is to save 100k/year with the intent of purchasing an apartment building in approximately 10 years. I am undecided if this will be through a syndication or if I would want to purchase the property outright. Either way I need experience in RE before executing such a large deal, so I want to start dipping my feet into real estate during the 10-year interim and learn as much as possible.

My question is what are some RE investment opportunities that will 1) provide experience that will be beneficial towards my goal of owning an apartment complex, and 2) keep my investment liquid enough to cash out when the time comes for the big purchase.

As I currently have zero real world real estate experience, I figure just about any area would benefit me, however I would imagine there are other avenues besides S/MFH. I would like to find something with modest risk/reward as not losing my cash is more important than a substantial ROI. I am in Western Montana.

I would love to hear advice any of you have to share - thank you for reading this!

First step is to educate yourself on the business and the markets you’re interested in. There’s no need to wait once you have the knowledge.

Enrique Huerta

Investor · Los Angeles, CA · Member since 2015 · 213 posts · 162 votes

6y

I'm glad you found that data helpful. If you have any questions during your homework period, feel free to connect and reach out. I'm extremely passionate about multifamily investments and have been in real estate since 2014. I'm happy to help point you in the right direction.

Roni E.Pro Member

Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes

6y

Here are some idea we will start from low investment to high investments. First get Joe Fairless book, then get Michael Blank SDA, and then get your real estate license. From there see if you wish to buy a more robust course which could be thousands of dollars. I would join some local meetups. You could then transition to working in house for an apartment owner to learn the ropes.

Alina Trigub

Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes

6y

@Account Closed

As many people already said on this thread, an apartment complex will not solve the financial freedom goal, especially if you wait ten years. It's absolutely fantastic that you're thinking about real estate investing now. So take the time to educate yourself and find the best strategy that will work for you personally a lot sooner than ten years from now. You may decide to be active or stick to passive sides, but do the research first before making such decision. Here's an article that will help you along the way:

https://www.biggerpockets.com/member-blogs/10850/86621-six-steps-approach-to-getting-started-in-real-estate

Ryan Hogan

Investor · Asheville, NC · Member since 2019 · 19 posts · 41 votes

6y

@Account Closed if you're interested, check out "The Complete Guide to Buying and Selling Apartment Buildings" by Steve Bergers (c. 2005)... while it is an older book, the fundamentals of the book haven't changed. After that, also highly recommend Roni's recommendation for Joe Fairless' book(s)... he has REI Advice, Vol. 1 and 2, I haven't read those yet. I have read Syndication Book and it lays out the entire syndication process, start to finish, in an easy to comprehend way. A specific niche to apartment investing is "value add" where you could be in the mix of apartment investing well before 10 years - Jake and Gino's Wheelbarrow Profits is a great book to learn about the concepts of this process. If you're fully committed to real estate investing and are looking for ways to accelerate this process, I can't say enough positive things about getting involved with a mentorship / coaching program of like-minded individuals. They will teach you things you didn't know that you didn't know.

Billy Smith

Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes

6y

Hanging around a person that is in the trenches is the key ,lots of this is the ability to mange people ,money .

It is tougher now because of the market is really hot making deals hard or a real haggling experience .

If folks know you have real money they may allow to take up there time ,lots of folks are just talkers with no money so they have nothing to make the connection worth while .

Khalid Bryan

Real Estate Broker · Fort Lauderdale, FL · Member since 2018 · 196 posts · 191 votes

6y

@Kamran Javadi just make sure to work with a realtor with the experience and ask a lot of questions in the process. Most times the best course of action is to just take action and figure it out on the way.

Todd Dexheimer

Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes

6y

Continue educating yourself right now and sooner, rather than later, start putting your money to work. You can do this a few ways:

1. Buy smaller properties to create a portfolio and gain experience. I would consider value add

2. Invest passively in syndications - these are usually 5-8 year holds

3. Joint venture with others on mid-sized properties

4. Lend your money as a hard money lender

You can do a combination of these or choose other strategies. The most important thing is that you learn and take action. Sitting around for 10 years saving money at less than 1% is not a plan.

Isaac White

Real Estate Broker · Indianapolis, IN · Member since 2014 · 16 posts · 8 votes

6y

I cannot agree more with the advice that's been given. It is no so much where you start, but that you get started! You will need equity or skin in the game to show lenders, investors and partners your track record. One method to scale up to coordinating your own syndicate is to invest passively with others who are doing it. In doing such you will gain valuable experience in running the numbers to determine which type of investment(s) fit your approach and needs. Even managing smaller mutlifamily units or residential income properties will give you insight into what it will take to scale your business, manage tenants and achieve investment returns. If you start now, in 10 years you will have the knowledge and experience to hit the ground running instead of starting from ground zero.

OP

Member since 2019 · 22 posts · 6 votes

6y

@Roni E. thanks for the book recommendation (Joe Fairless). I've just added it to my Amazon cart, looks like just what I was looking for.

OP

Member since 2019 · 22 posts · 6 votes

6y

@Alina Trigub I actually read your article a couple of days ago! Great read and it helped clarify some of the different investment avenues for me. I have it bookmarked!

OP

Member since 2019 · 22 posts · 6 votes

6y

@Ryan Hogan thank you for the recommendations. I have all 3 of those books in my Amazon cart. I am especially interested in Best Ever Apartment Syndication Book by Fairless....I think a complete syndication run down is what I need.

And I just joined a local RE group, I will inquire about a mentorship at the next meeting!

Rick MartinPro Member

Rental Property Investor · Redondo Beach, CA · Member since 2017 · 411 posts · 477 votes

6y

@Account Closed not sure if someone already suggested this, but once you invest in some small multi families, and build some equity, you can 1031 exchange your equity into a tenants in common as a down payment into a larger building, or joint venture with partners. Definitely don't wait a decade. Get educated and get started. You can also invest into a syndication as a limited partner (as long as they accept non-accredited), and learn while you earn. If you are going to syndicate one day, it is helpful to see it from the limited partner side of things.