All Forum Posts by: Ellie Perlman

Hi @Aaron Champion

congrats of your decision to get into the multifamily game! When it comes to MF, credit is not important. It's mainly your net worth (which should be equal to the loan amount), and the property income. I'd stay away from HELOC - the interest rates are higher than other loans, and you don't need to risk your main residence to start investing.

You can start small - 10 or 20 units, with a partner or with several partners. Another way is to invest passively with a syndicator. 

You are welcome to check out my website for information on how to do it. Good luck!

You will find accredited investors in many conferences. Best Ever Conference is one of them and you can also chock The RE Guys' websites. They hold many good events such as the Secrets of Successful Syndication. Old Capital has a big event in Dallas this September. Unlike the previous two, I never attended their event, but I heard it should be a good one.

@Michael Cavitolo - you want to get in the RE game, but the nerves hold you back. I'd either invest with a syndicator and learn the business this way, or find a mentorship program and learn about RE investing. 

In any case I won't spend all the money in one investment. Try to invest $25-$50K in each investment, spread out the risk (don't invest all at the same time). Give yourself a chance to learn what you like and what you feel comfortable investing in.

Good luck!

Congrataiolations on your decision to get into the multifamily game! A great book to start with is ABC of Real Estate. I wrote an e-book for 101 Multifamily Investing. Will be happy to send it to you. You can also listen to some good podcasts about multifamily investing: Michael Blank and Joe Fairless for instance.

You can also start investing passively and learn this way.

Best of luck!

thank you @Lucia Rushton

@Matt Heerwald I'd love to connect with you and share ,my knowledge of MF investing and how to qualify a deal that a syndicator sends you, and what is a good Cash on Cash return these days. Feel free to reach out to me and I'll be happy to help. 

@ Nikolai Ray - here it is: https://www.irr.com/reports/IRR%20Viewpoint%202018...

look at p.20

@ Mary Jay - I personally buy B and C, and the key is to buy those properties in a better area than they should be: a B property in an A area or a C property in a B area is the best deals you'd probably find, because the upside potential is high (you can improve the property, renovate the units and increase rents, and you will not find it hard to find tenants because the area is strong).

@ Steve A. - I'd suggest to look beyond the cap rate. Yes, a deal with less than 5% cap is most likely not going to work (because the cost of money is higher, and now interest rates are around 4.6%-4.9%). BUT if you buy a property with a low cap, then renovate the units/amenities/reduce expenses, raise rents and by that improve your NOI (net operating income), then the cap rate after 1 year will be significantly higher. If the property is distress, or if you were able to increase rents significantly ("forced appreciation") - your cap at the end of year 1 ca definitely be more than 7%.

Even a 7% is great, but depends on the market. If you buy at 7% or even 12% cap, but there is no appreciation, then your total returns will be much lower than a deal in a strong market/location with a 6% cap and if you were able to see it after 5-6 years at 5.5% cap. 

Just wanted to share a different way of looking at cap rates...hope that help!

@ Chris Lopez - congrats on your move! Texas is a GREAT market to invest in, if you are interested in multifamily properties. It'a a strong cash flow market, but also has a solid appreciation factor (maybe not as strong as NY or SF, but the cash flow is significant). You can use your knowledge of the Texas market to buy some multifamily properties. If you do so, my only advice is to be cautious when you do so, because it's a seller's market and prices tend to be inflated in many cases. Feel free to reach out to me if you'd like to chat about that option - I'd love to share my knowledge with you. Best of luck! 

@ Gary Clisele - investing with a syndicator/lead investor is the optimal passive investment IMO. You do have to do some research on the syndicator, and make sure you feel comfortable with him/her, go over the offer document, etc, but once you invest with them, you are passive - you don't manage the property, deal with the bank, etc - they do everything for you. You pay them a fee, but still can get significant returns (15%-20% IRR, 7%-10% CoC).