Would you find a way or ask for help? MF in West Houston

[Jorge De Jesus]

Hello BP, really hope you can help with this one! I am in Harris County Texas, more specifically the city of Katy,TX a Houston suburb. I’m looking at an off market Multifamily deal. It would be my first. I do not have the net worth or credit that bankers I’ve spoken to require. I don’t have the flipping experience some private lenders require. My circle of influence may be able to help but they are hesitant. I’m not one to quit because I’ve hit bottom before and it’s not the end of the world. I’m willing to put in the work to find the money and the credit partner. OR I can wholesale the deal make a good profit for my time, learn a bit more about Multifamily along the way and ask my end buyer to either let me keep some equity in exchange for a reduced wholesaling fee and teach me the value add process or let me manage the property for the 8% or both since I live down the street. OR I can reach out to Multifamily owners and/or syndicators in my town and work out a structure where we partner either both as GP or I as GP and the partner as LP. Or perhaps a simple JV structure?

[Dave Chapa]

Do you have any net worth? Depending on the deal and size it could be full recourse loan. I don't know of anyone that would take on a recourse (or even a non-recourse) loan with someone who has no skin in the game. Work on your credit and build a little net worth, this will help you look more attractive to potential investors and banks.

Do you have any experience managing apartments (or even a house)? Do you know the fair housing and tenant laws? HAA offers a IROP class that can teach you the basics about managing an apartment. I highly recommend you taking the class. It’s 6 classes, one day a week. I don’t know what it cost now, but it was $360 when I took the class several years ago.

Can you buy a rental house with the credit and money you have now? This is a good place to start. I have several friends that started with SFH that now solo own apartments. It's a good way to build net worth and one of the gateways to MF.

I'm not telling you to give up, just to refocus your energy. Instead of jumping into a MF deal with no credit, money, or experience. Focus on building your credit and down payment on a SFH. Use this deal to help with building your down payment.