Getting started in Medium to Large Multi-Family

[Reed Meyer]

How can I get started in medium multi-family without a track record? I am thinking the 16-20 unit range. Obviously need about ~75% loan from the bank and would need significant money from a partner for the down payment and rehab. 

I am looking at opportunities in areas with large rent disparity where we could go in and rehab that are already selling at around 6Cap. We could rehab these and increase rents by $100-$150 units each and force appreciation so the math works great. However, how can I convince the bank and a partner to get on board when I have no experience? Will a good, confident sales pitch and well organized, convincing OM be enough to get the money if it truly is that good of a deal?

Or is it truly a necessity to start small and get a 4 or 6 unit under my belt to prove myself before moving up to bigger deals? I really just want to jump into a big one first because I know that they'll take similar work upfront anyways and the higher unit counts are far more lucrative due to benefiting from economies of scale.

Thanks a lot. I'd love to get any and as much advice as possible!

[Ivan Barratt]

@Reed Meyer 

2001: started my career in real estate working for a mentor (a real estate developer / investor) and house hacking my first duplex.

2008: got my @$$ handed to me in the GFC. *Best gift of my real estate career.

2010: Started Barratt Asset Management (BAM) first as a property management co (managing rentals for other investors) while practicing some brokerage on the side until I had enough management contracts to stop brokering deals. At the same started doing small deals (duplex, triplex, 6 units, etc where I could execute a heavy rehab / value add play).

2012: Bought my first bigger deal at 35 units with one $$ money partner already in my network.

2014: Syndicated a 60 unit deal and never looked back. (**most of my first investors were management clients who saw and liked what I was doing).

2020: Me and my partner own 3,000 apartments via syndication (along with nearly 200 high net worth individuals and families that invest as LP's). BAM is asset and property manager and we don't take on any more 3rd party management deals. We only manage what we own and control.

Advice: while there may be some unicorns out there that go big early and succeed; there are far more successful people that started small and built unstoppable momentum one turn of the wheel at a time. Start tomorrow with a small deal, fail small, learn, rinse and repeat. Focus on doing that every day and 10 years from now you'll be called an overnight sensation. ;)