All Forum Posts by: Mack Benson

 I have my opinions on a few but would prefer to not share them in an open forum because it could seem as though I am endorsing one over another. Feel free to DM me and we can discuss further.

I get it and I was in the same boat. I wanted to get into apartments but didn't have the capital to be able to buy anything but the worst of the worst duplexes in the worst areas in town. I spent well over a year chasing every shiny object I could find trying to find a way to build my capital account but not getting anywhere. The market is/was tough and everything I found was way overpriced or too tight for me to make money on. When I was looking at SFRs I did the math and found it would take a ridiculously long amount of time to have the cashflow plus my salary afford my next purchase. 

Nothing made sense and then we had another kid and things changed. Life was put into perspective and I realized the long road to apartments through residential apartments didn't make sense, at least not if I wanted to be in my kids lives while they were still small. I decided I needed help and time was of the essence so I started shopping for a paid mentor/coach. For me, the most important thing was the size of the existing network I was joining so that became a huge factor during my interviews. 

That's a long way of answering your question but no, you don't NEED to do residential before getting into commercial but the correct answer for you can only be determined by you. What are your goals and what are your life circumstances? What are your skills and what is most important to you?

Starting from 0 and wanting to get to the finish I think you have a couple options.

You could do trial by fire. Go straight to buying a property and cross your fingers. A lot of people do this and those are who we buy from at a discount when they realize they are in over their heads and the completely hosed the initial transaction and they don't have any idea how to manage a property.

You can spend your time self educating. Nobody can know how long it will take you but you can get a good education here. BiggerPockets is great for what it is, an online forum of people's opinions. You can buy and read book after book and one day pull the trigger.

Get a local mentor who can help you through the process and maybe partner on a deal. This is how a lot of people start out and it is tried and true. Many people find a local mentor through meetups and networking events in their local area.

Join a paid coaching/mentor program. When family dynamics made me realize that the long slog of self education is too slow I decided to go down this path and I do not regret it in the least. The best coaches and programs are not cheap but I honestly think they can get a person from 0 to educated and confident the fastest. There are a lot of people on BiggerPockets who think paid coaches are a waste of time but I don't understand why they choose to beat their head against a wall with self education or trials by fire when they could take a shortcut to get to their goal.

Good luck!

I echo @Taylor L.s word on Joe Fairless's Best Ever Apartment Syndication book. It's a hell of a dense read and will take you from soup to nuts and has enough chapters that you can easily get to the nugget you want to read without spending too much time searching.

Capital invested with a reasonable expectation of a return is a syndication. If Tom, Joe, and Pat are investing their capital and each of them has a specific job, laid out and explained in detail in a partnership agreement then a normal joint venture may be possible but if they do not have jobs in the partnership then you will want to consult with a syndication attorney or a securities attorney that specializes in private placements or real estate syndications. In many cases I have heard of family and friends being a newbies first investor but everything needs to be laid out in clear language with the risks known. It would also help if you have a partner who is experienced to alleviate potential fears but that is another conversation outside of what you have asked.

I've said this many times over the last few months and the advice, while generic still fits.

Education x Action = Results. Spend time educating yourself then take massive action to get the most results. This education can come from books, podcasts, videos or from a mentor. Education is the basis of everything, as you gain knowledge you gain options.

Get clarity with your goals and your purpose. Why do you want to do real estate? Do you want to own residential, commercial, industrial? Are you looking for long-term generational wealth or just some side cash to supplement your current salary? I think this is one of the most important things to focus on because it can help guide you on your path and keep you on task.

Stay the course and do not get distracted by this weeks shiny object. There are so many different paths one can follow to success in real estate and as you gain knowledge you will be tempted to stray from your goal. This week it could be wholesaling, next week it could be BRRRR, the following week you might hear about syndication. Knowing your goals can help prevent shiny object syndrome and keep you focused on the task you set out for yourself. If you are bouncing from one task to another you can never master a single one. Instead, focus on one until you master it then look to the next.

Good luck!

I would reach out to local mortgage brokers that specialize in the commercial and residential spaces. With a quadraplex you can qualify for residential financing as well as commercial so you don't need to pigeonhole yourself into one method of financing. Mortgage brokers can leverage multiple lenders rather than you trying to find a bank. At times they may even have an out of state lender they use. 

My agent always provides me with a net sheet that includes all of my costs to close on the sale of my home. Does yours have something similar? The last couple times I ran numbers the price to close came out to about 6-7% of the total of the sale unless I needed to cover some of the buyers closing costs, then it could be as much as 10% of the sale price.

Depending on your pre-payment penalty I would lean toward the second one. Today I am not sure how long it is going to take before things come back after covid so the longer term is tantalizing. Plus, getting the extra three years is only going to cost you around $75 per month which really isn't much.

I started a blog on my site about 10 weeks ago and it had definitely helped drive traffic to the site. I haven't dedicated the time to dive into the SEO process so the traffic generated so far has been via LinkedIn and Facebook shares. Another thing it has done is provided me with credibility while connecting with other investors. The third thing it has done is help organize the thoughts that have been rattling around in my skull for years. Now that I am putting them in a written form the thoughts seem to take shape better and I am more able to articulate them to others. The more I have written, the easier the writing has become.

If you have a website I really thing it is worth it even to get 10 long form blog posts out there.