How did you get started in Multifamily?

Investor · Apex, NC · Member since 2018 · 253 posts · 215 votes

Congratulations on getting started on your MFH journey @Brian Alfaro!

The question of whether to hire a coach or not is an age-old one. You're bound to hear lots of different experiences from people that have done both. I think at the end of the day it's going to come down to what kind of learner you are and what value you see in accelerating your path.

Some like to go at their own pace and dig in on their own (as it seems you've done with SFH). Others like the structure and accountability that having a teacher provides. If you know you get more done when you have somebody holding you accountable, then a coach might be right for you.

Additionally, while you can move quickly on your own, having a good coach can definitely accelerate the progress you'd be able to make alone, getting you to your end goal faster. Is that worth $5K to you? $30K? Most of these programs are only as valuable as you make them, so still be prepared for quite a lot of work either way.

There is a middle ground here, which is building out your own network and providing value in the ways you can vs. hiring out. Sounds like you already do a bit of networking so if that's in your wheelhouse then maybe an organically assembled group of coaches is the better route? It all depends on your personality, needs, and goals!

6 Reply

Jonathan GreeneBusiness Member

Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes

6y

Any coaching program that wants you to put into their deals is not a coaching or mentoring program, it's a pyramid scheme. Coaching and mentoring in REI is best suited for those who have an existing business and want to take it to the next level and need better knowledge and advice to do it in their market. Any widespread nationwide REI coaching isn't going to focus on your market and what matters to you. You will convince yourself to drink the juice, like all the other people in the class, and the truth is, it may work. But you will be running someone else's system and paying for it. If you've been doing all the things you say you have you should have built investor masterminds (for free) with local investors doing the same thing where you can workshop ideas or choices. Also, what is dabbling in SF? Have you done any deals? What is your background? Too many people seek coaching as a pat on the back to make deals, but it's not their money, it's yours and if you pay it all to a "guru" you won't have any left to invest.

[email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro

Zen and the Art of Real Estate Investing59 Reviews

Website View Page

3 Reply

Mark Sewell

Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes

6y

@Kevin Wood is probably a good guy locally to visit with, Brian. @Tony Castronovo is another guy that graduated from SFR rentals and moved into MF. And @Account Closed is a super talented guy - this guy gets advanced degrees for fun in his free time. I hope these guys don't mind be mentioning them.

Brian, don't sell yourself short - I've seen what you've done since we connected here on BP and you got a lot on the ball, man.

1 Reply

Jaysen Medhurst

Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes

6y

I know there are legitimate "coaching" and "mentoring" programs out there, @Brian Alfaro, but I'm very skeptical overall. For me it comes down to simple economics. Someone only "mentors" for money if their return is better doing that than it is doing deals. Otherwise they're losing money every hour they "mentor." So, if your "mentor" makes more money from you then doing the thing they are "mentoring," how good are they really at doing that thing?

1 Reply

Cody L.

Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes

6y

I started at the same age you're at now. And I didn't know sh*t. Worse, there wasn't nearly the resouces there are now. But looking back, maybe that was better. I think if I had all the youtube 'personalities' and sites I'd have focused on learning vs. doing.

So how did I buy my first property? Since I didn't know anything? The same way I do now. I had 20% saved up, found a bank to do a loan, and bought it.

It was an 8 unit in Montrose (on Branard). I was so clueless on the first deal that when it came time to do my first lease, I had to call a friend who worked at a property and have her bring me a copy of a blank lease. And she helped me fill it out.

When you just jump in the fire you learn quick. And luckily after a few deals under my belt I met a guy who was doing the same thing as me and we were able to learn a lot from just doing and talking about what was happening.   He got to 1000 units quicker than I did but then he sold everything and I kept going.

So I'd say this: Don't overthink it. If you see a deal that looks to make sense just buy it.

10 Reply

Brian Alfaro

OP

Multifamily Syndicator · Houston, TX · Member since 2018 · 188 posts · 192 votes

6y

Great advice, @Ryan Daigle. I appreciate your insight!

@Jonathan Greene. Sound advice and something I am wary of. Making sure my coaching is actively doing deals is important to me. If their primary business is mentoring, I definitely have to be careful. Doesn't mean it won't work or isn't worth it, but it's something to consider.

As far "dabbling" goes, I have two properties currently, have wholesaled two other homes, and I have represented investors as their Buyer's Agent (I have my license) and closed some deals. I've accomplished this in about 18 months (zero RE experience before late 2018). I'm definitely not looking for a pat on the back to go do deals - I'm not looking for a cheerleader.

@Mark Sewell knows! Appreciate you chiming in, buddy. I'll be sure to reach out to the people you mentioned. Lets plan some time to get together again and catch up when things normalize here.

3 Reply

Brian Alfaro

OP

Multifamily Syndicator · Houston, TX · Member since 2018 · 188 posts · 192 votes

6y

Originally posted by @Cody L.:

I started at the same age you're at now. And I didn't know sh*t. Worse, there wasn't nearly the resouces there are now. But looking back, maybe that was better. I think if I had all the youtube 'personalities' and sites I'd have focused on learning vs. doing.

So how did I buy my first property? Since I didn't know anything? The same way I do now. I had 20% saved up, found a bank to do a loan, and bought it.

It was an 8 unit in Montrose (on Branard). I was so clueless on the first deal that when it came time to do my first lease, I had to call a friend who worked at a property and have her bring me a copy of a blank lease. And she helped me fill it out.

When you just jump in the fire you learn quick. And luckily after a few deals under my belt I met a guy who was doing the same thing as me and we were able to learn a lot from just doing and talking about what was happening.   He got to 1000 units quicker than I did but then he sold everything and I kept going.

So I'd say this: Don't overthink it. If you see a deal that looks to make sense just buy it.

Always appreciate your advice! Thanks for reminding me not to overthink things - I definitely get analysis paralysis and sometimes hesitate to take action because I feel like I need more education/experience. The first deal I had under contract for a SF I backed out of because I was gun-shy. Another investor picked it up. Since I knew what it was selling for from the wholesaler and I had my rehab numbers already, after I got my license I pulled what it sold for in late 2018 when I missed out. The investor picked it up and made $25-30k on the flip. I keep this story top of mind as a reminder that you'll never hit anything if you don't take a swing...

1 Reply

Erik W.

Real Estate Investor · Springfield, MO · Member since 2017 · 1k+ posts · 2k+ votes

6y

Depending on what you mean by multi-family, I got into it just by finding a deal that worked with my numbers. I have four duplexes and two quad plexes, and SFH's. If you pay me $20,000 I'll share my "secrets" with you. How's that for a deal?

Anyway, I agree with others you probably don't need any guru to tell you how to make money. First, almost all the info you'll need is specific to YOUR market that you invest in, so you'd probably get far more relevant info hiring an attorney and an accountant who specializes in helping clients who do these kinds of deals. They can tell you what the real deal is in THEIR town vs. "Anytown USA" which is what most gurus give you.

Second, you will need these professionals to be on your team eventually anyway, so why not get them now vs. later? Even at $200 / hour for their time, you're going to get a wealth of information, and it's from someone who is local.

Those professionals can introduce you to some of their clients that actually do the deals. Take those clients out to lunch and pick their brains. Offer to work for them for free for 2-3 months in exchange for education.

Total cost for hiring some Pros and schmoozing some real life successes should be under $1,000. Or you can pay me just $19,995 and I'll throw in my latest course on CD.... high tech all the way with "cutting edge" information! (*wink)

3 Reply

Michael Le

Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes

6y

@Brian Alfaro, Let's jump on a call and I'll give you some feedback

1 Reply

Joseph CacciapagliaBusiness Member

Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes

6y

Please do not spend $20K on coaching/mentoring. My guess is 1 out of 100 people that make that investment are actually better off. That's just based on my anecdotal evidence of being in this business for 15+ years.

My first multifamily property was a duplex that I house hacked. That's straight forward enough, but I'm sure not what you're looking for. My second multifamily deal was a 10 unit property. I found the deal off market, negotiated great terms, and brought in experienced investors to take it and run with it. I ended up with 15% of the deal, with no money invested and I didn't do anything after initially getting it under contract. This might not sound like much, but it's probably the highest $/HR work I've ever done. I'm sure there are plenty of investors in Houston that would be happy to partner with you, if you brought them the right deal and were willing to let them take over. It will be even easier, if you're leaving some of your money in it.

[email protected]979-218-2286

Joseph Cacciapaglia powered by Morty

Website View Page

1 Reply

Kevin Wood

Investor · Houston, TX · Member since 2013 · 471 posts · 267 votes

6y

Thanks for tagging me @Mark Sewell. @Brian Alfaro I got started in 2015 investing in small multifamily in Houston. At the time I was out in the Bay Area at Google, but grew up in Houston. You should not do any of those coaching programs that are 5 figures.

I've seen those work for people that would never take action themselves they essentially have to pay someone to take action for them. The fact you are self educating means you probably don't fall into this category. Agree with @Cody L. in that you don't need to know anything to get started. Listen to my BP podcast interview on show 167. I cringe now listening to it.

The great thing about real estate is that it's a great asset class and if you follow basic fundamentals you will be ok. Don't look for homeruns. Look for base hits and learn the business. I now primarily manage property for myself and others in addition to buying property.

I office near the Med Center and always enjoy meeting other investors. Feel free to stop by some time.

1 Reply

Ronan DonnellyPro Member

Investor · New York City, NY · Member since 2012 · 332 posts · 385 votes

6y

Hi @Brian Alfaro, you are walking on a well trodden path by having started with SFH's and realizing that they don't easily scale without building and monitoring systems and they are also less efficient than multifamily.

I followed the same path and having read a ton of books, decided to pay for a coaching program. My rationale was that this would allow me to accelerate my progress which was important to me given that I have a demanding W2 job at the time and was struggling to make progress on my own. I feel like I have gotten more value out of the program than it cost me. I would say however that you could easily make a lot of progress on your own. I would recommend starting with sourcing and underwriting deals and when you find a good one look for local partners to bring experience and capital.

Good luck and remember, there is more than one way to skin a cat.

[email protected]

2 Reply

Tony Castronovo

Rental Property Investor · Park City, UT · Member since 2016 · 678 posts · 531 votes

6y

@Brian Alfaro as @Mark Sewell pointed out, I started as a single family buy & hold investor. I had a great process and got pretty comfortable with it. But like you, I felt like I needed to scale my business and get to another level. After selling my single family portfolio, I 1031 exchanged the proceeds into my first multifamily deal...a 20-unit. I wanted something I could afford with my own money and cut my teeth on something big enough to be challenging but not too big to miss out on the education. The "on the job training" was priceless. I found that much of what I had learned and the skills I developed in the SFH space translated pretty well. But there were definitely notable differences. It was also a big change for me to make the switch from self-managing to professional property management. But these are things (for me anyway) that cannot be taught in a classroom.

I climbed the learning curve pretty quickly and became comfortable with multifamily operations. The next step for me was to 'go bigger'...which meant raising capital through syndication. Being a passive (limited partner) would certainly have been a way for me to gain experience. But instead I just attended as many deal presentations as I could and raised the bar on my networking. I surrounded myself with guys & gals with much more experience in the space. People like @Michael Le who inspire me every day and push me to think bigger and step out of my comfort zone. After several months of learning the mechanics I syndicated a 60-unit with a general partner who has been sort of a mentor of mine for many years. Every day I learn something because I immerse myself with like-minded folks...like those on this thread.

As far as mentoring & training programs I will say this...I know many successful investors who work with a couple of the larger programs you have probably run across. What I find most intriguing about these programs is the "ecosystem" they have created. When I syndicated my most recent deal I had to educate a lot of my investors, whereas if they are already in the program they "get it". I have given alot of consideration to joining a program and attend alot of their networking and educational events. I don't know that the cost is what deters me as much as my way of learning is a bit of the DIY approach. Happy to talk with you further. -- Tony

3 Reply

Brian Alfaro

OP

Multifamily Syndicator · Houston, TX · Member since 2018 · 188 posts · 192 votes

6y

Sounds good, @Michael Le. I just sent you a PM!

Great advice, @Erik W.. Going to put it on my to-do list to plan some lunches (when quarantine is over) with some real estate attorneys and syndicate attorneys.

I think you're right, @Joseph Cacciapaglia. Thats the same rule for SF - If you have a great deal finding a partner isn't hard. Need to remind myself of that for MF as well. I tell myself there are different rules, which I'm sure apply in some cases, but the overall philosophy of a good deal is a good deal holds true in any asset class.

@Kevin Wood - I'll shoot you a message! I would love to take you up on the offer once quarantine is over. I'll be sure to listen to your Podcast as well.

@Ronan Donnelly - Good point. I have a lot of flexibility based on my current situation with my other business, so the need for a focused mentor to force progress in a short amount of time isn't necessarily what's best for my situation.

@Tony Castronovo Great insight. Thanks for sharing your story. I'll shoot you a message so we can chat further. Would love to connect in person once we can.

Thanks to everyone for the perspective!

2 Reply

Enrique Huerta

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

6y

@Brian Alfaro, If I were you I would start the process the same way you tackled SFR investing. Read the books, attend the webinars and virtual meetups, and reach out to people who may have the time to take a personalized call. Watch YouTube and underwrite deals. Learn by trial and error. You have the willingness so put in the time and effort to learn. Once you have a foundational understanding of the basics...finding deals, calculating returns, etc. then you can take the next step.

When you're not doubting the financial commitment of coaching, you could consider a coach. Coaches are great but as someone mentioned they are more helpful when you have a baseline to build from. They can take you to the next level. Otherwise, you'll be learning while spending money and time rather than just time. There's enough free resources to get you going in the right direction including some core books that will shorten your learning curve. DM if you'd like the books but one that comes to mind is Frank Gallinelli's book on Cash Flow and 36 other something...google that and you'll find it. That's an AWESOME place to start. I'm also happy to jump on a call with you to share my experience. No, I won't charge you anything or pitch you any products, deals, etc. I genuinely am happy to share my experience and learn about you and what you're looking to do. We currently own over 2k units in DFW so I have some insights that may be helpful to you.

Best of luck!

1 Reply

Brian Garlington

Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes

6y

Househacked a Duplex in East Oakland............and moved on from there.

0 Reply

Alina Trigub

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

6y

@Brian Alfaro

Consider it for what it's worth: coaching may escalate your progress however by the same token you can potentially find more experienced investors partner with them via JV, offer to be boots on the ground (the assumption is of course that the property is going to be in Houston MSA) and gain the experience this way.

Here're a few articles that will give you additional guidance about MFH investing:

https://www.biggerpockets.com/blog/10-things-investors-should-know-before-jumping-into-multifamily-housing

https://www.biggerpockets.com/member-blogs/10850/87253-should-i-scale-my-investment-from-single-family-homes-to-multifamily

1 Reply

Todd Dexheimer

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

6y

First step would be to pound the books and podcasts. Many podcast are MF centered and are great to learn from. My podcast has a 16 episode apartment investing series from start to finish. Also, take a look at many investors website and you'll find free e-books and blogs dealing with MF, as well as right here on BP. I won't take on a coaching client until that step is complete.

After that, investing in a coaching program may make sense. It really depends on what you need. The good is that it accelerates your learning and time frame to get into larger deals, it gives you access to a network and helps you avoid mistakes. The bad is the cost and the fact that if you don't put full effort into it, then you just waste your money.

And 31 years old is not too young to get started in large multifamily.

1 Reply

Kanita Jefferson

Real Estate Broker · Kansas City, MO · Member since 2015 · 33 posts · 13 votes

6y

@Brian Alfaro

Hello. I woukdnt dabble in mutilfamily right now....tenants are getting rent deals and about to get more deals due to CONVID19...good luck

0 Reply

Charles A.

Rental Property Investor · Jacksonville, FL · Member since 2015 · 208 posts · 282 votes

6y

Brian,

Please do not pay $25k for a mentor program.
Click on my profile and look for my blogposts.

You'd probably learn more there than you would in that $25k course.

And my only guru bootcamp ever was main street USA.

0 Reply

Pat L.

Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes

6y

We originally got into multi's as an income guarantee on all the investment lease-to-owns/contract-for-deeds we began doing 25+ years ago.

We had a number of local guys (& still do) interested in 'getting into' REI but as their down pmt was low & our rates were high we found the 2-3-4 units provided more than enough cash flow to compensate us for our financing option, pay into an escrow for taxes, ins etc, & still provide the 'client' with enough $$/door to make it worth their while. This also provided enough income for them to maintain, repair & rehab on their own dime.

It has been a very profitable/successful strategy that has allowed many of them to eventually get conv. financing or we just sold it to them & held the mortgage note after some years of paying on-time. In fact one now has 9 of our properties bought this same way, his kids have 4 more.

Admittedly we have taken a few back & repackaged them to others, some as many as 6 times & some completely rehabbed at their expense. Our current oldest is maturing August 2020 after 15 years @ 13% on $38k for a foreclosure we picked up for $13,500. Another we just took back after 9 years, 14% on $68k 15 year term for an initial buy of $46k minus the $7,400 down. Beats being a Landlord !!!

1 Reply

Brian Alfaro

OP

Multifamily Syndicator · Houston, TX · Member since 2018 · 188 posts · 192 votes

6y

Thanks to everyone who responded! Conclusion seems to be there is more than one way to skin this cat...

0 Reply

Enrique Huerta

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

6y

Originally posted by @Brian Alfaro:

Thanks to everyone who responded! Conclusion seems to be there is more than one way to skin this cat...

100%. There's always many routes to an end goal. Use what's worked for you in the past and if you have doubts about financial commitments then do what you can with what you have now. The next steps will naturally arise as you make progress!

0 Reply

Greg Dickerson

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

6y

Originally posted by @Brian Alfaro:

Hello BP Community! I am getting started in my Multifamily journey after dabbling in SF and realizing it will not allow me to accomplish my goals in time (cash flow to live on + wealth). I'm only 31, but I dream big. I have some questions..

I learned everything I know about SF investing by reading a new REI book a week (sometimes 2), taking notes, going to 1-2 meetups a week locally in Houston, networking and learning from those in the SF game, attending free webinars, reading forums on places like BiggerPockets and watching YouTube. When I have a goal and set my mind on something, I go all in to educate myself to be as best prepared as I can be when I pull the trigger (without trying to get analysis paralysis). I get obsessed with the material. I am curious - what is everyone's opinion on this learning strategy for Multifamily? Can it be done, or do I need a paid coach? I have a list of eight coaches I am evaluating at the moment with programs that range from $2k-$25k+.

My long term goal is to eventually work my way up to being a co-sponsor and sponsor if syndicating. My short term goal is to partner to take down something small and get my feet wet in the space and build credibility with lenders & brokers. I don't have enough liquidity right now after dabbling in SF (which I still own) from what I understand to take on some of these $20-30k mentorship programs these coaches are selling AND then do a contribution (which seem to run $25-50k minimum) if I actually find a deal or invest passively (which others are telling me is where I should start). I'd love to put in some sweat equity (be hands on and help) for someone doing deals and make a capital contribution, if needed, but since networking might be limited for a while this year I have a feeling it could be a challenge finding someone this year. Won't stop me from trying and networking.

Knowing my goals and position, any advice, stories on how you got started, or recommendations on what you would do if you were me would be helpful! If it helps to know, I am in Houston, TX. I look forward to reading replies and connecting with others!

Cheers!

I started with nothing. I had no money or connections and started out learning everything the hard way and by working for other investors and developers. I built several companies from the ground up and used the profits from the business to invest in other assets. This enabled me to scale pretty fast. I have spent over $300k on books, programs, seminars and mentorship and it ha been worth hundreds of millions. There is not better ROI than investing in yourself.

All the being said my advice to you right now would be to educate yourself thoroughly on the business and markets your interested in. Become an expert. Continue to build your business and your cash. Whatever is making you money right now double down on that and scale it while the market is hot. Apartments will be there when you are ready and have more resources to work with.

A couple of other suggestions would be to get into the broker side of game or join up with other syndicators and fill a gap with your strengths.

0 Reply

Brian Alfaro

OP

Multifamily Syndicator · Houston, TX · Member since 2018 · 188 posts · 192 votes

6y

Originally posted by @Greg Dickerson:

Originally posted by @Brian Alfaro:

Hello BP Community! I am getting started in my Multifamily journey after dabbling in SF and realizing it will not allow me to accomplish my goals in time (cash flow to live on + wealth). I'm only 31, but I dream big. I have some questions..

I learned everything I know about SF investing by reading a new REI book a week (sometimes 2), taking notes, going to 1-2 meetups a week locally in Houston, networking and learning from those in the SF game, attending free webinars, reading forums on places like BiggerPockets and watching YouTube. When I have a goal and set my mind on something, I go all in to educate myself to be as best prepared as I can be when I pull the trigger (without trying to get analysis paralysis). I get obsessed with the material. I am curious - what is everyone's opinion on this learning strategy for Multifamily? Can it be done, or do I need a paid coach? I have a list of eight coaches I am evaluating at the moment with programs that range from $2k-$25k+.

My long term goal is to eventually work my way up to being a co-sponsor and sponsor if syndicating. My short term goal is to partner to take down something small and get my feet wet in the space and build credibility with lenders & brokers. I don't have enough liquidity right now after dabbling in SF (which I still own) from what I understand to take on some of these $20-30k mentorship programs these coaches are selling AND then do a contribution (which seem to run $25-50k minimum) if I actually find a deal or invest passively (which others are telling me is where I should start). I'd love to put in some sweat equity (be hands on and help) for someone doing deals and make a capital contribution, if needed, but since networking might be limited for a while this year I have a feeling it could be a challenge finding someone this year. Won't stop me from trying and networking.

Knowing my goals and position, any advice, stories on how you got started, or recommendations on what you would do if you were me would be helpful! If it helps to know, I am in Houston, TX. I look forward to reading replies and connecting with others!

Cheers!

I started with nothing. I had no money or connections and started out learning everything the hard way and by working for other investors and developers. I built several companies from the ground up and used the profits from the business to invest in other assets. This enabled me to scale pretty fast. I have spent over $300k on books, programs, seminars and mentorship and it ha been worth hundreds of millions. There is not better ROI than investing in yourself.

All the being said my advice to you right now would be to educate yourself thoroughly on the business and markets your interested in. Become an expert. Continue to build your business and your cash. Whatever is making you money right now double down on that and scale it while the market is hot. Apartments will be there when you are ready and have more resources to work with.

A couple of other suggestions would be to get into the broker side of game or join up with other syndicators and fill a gap with your strengths.

Well said! Thanks, Greg!

0 Reply

How did you get started in Multifamily?

How did you get started in Multifamily?

Most Popular Reply

25 Replies