All Forum Posts by: Paul B.

Most of the responses are about whether any education program is worthwhile. I am going to address the other part of the question...

When I first started studying real estate investing, I thought it was quite odd that an investor would sell a property to another investor. Why not sell it on the open market and get top dollar from a retail buyer? Lots of reasons, actually, such as a faster close with a cash buyer, and some properties are simply only bought by investors, such as apartment complexes.  

When I was considering joining an education program, it was hard to wrap my head around the idea that a student would sell a property to another student. Is a win-win transaction possible? Isn't the best way to make money to either buy at a discount (if you're a buyer) or sell to someone who is overpaying (if you're a seller)? With multi-family, it is standard practice to leave some "meat on the bone" for the next buyer: you make some improvements, increase the income, and then sell it for more than what you paid a few years later. The next buyer repeats the process. You don't make every improvement possible, because then no one else would want to buy a property with no upside left. As long as the underwriting stays conservative and is in line with the market (not the hot market of the last several years, but the historical average for that area), it is possible for each buyer to make money. Eventually, there will be a downturn. Multi-family here in Texas has been on a tear in the last 7 or 8 years or so, maybe longer. Everyone knew it wouldn't continue that way forever. Will the last buyer end up being the greater fool who is stuck with a piece of crap when the music stops? If they overpaid because they thought they could continue to raise rents 4% a year, then maybe. If they were conservative and budgeted for flat rental income, or even a decline, then they might be fine. 

Anyway, back to the original question. If the students of the program were only selling properties to each other, that would be suspicious. But if only 1 out of 3 or 4 transactions involve a student selling to another student, and the rest are buying from or selling to outsiders, then I don't think it is necessarily cause for concern. You could even decide never to invest in a deal where the property was bought from another student, and still have plenty of opportunities left, if that made you more comfortable. I know of investors who invested in a deal, made a bunch of money when it sold, and chose to invest with the new buyer again in the same property!  

 I like this line. I happen to know which event @April C. attended, but even if I didn't, my response would be the same. Yes, the same information that a mentor will charge you for is available out there free from other sources. But plenty of bad information is also out there for the same cost, and often on the same forums or in the same types of books or YouTube videos. The real value of education is knowing which knowledge to apply and when, if any of it needs to be tweaked for your specific situation, and which needs to be disregarded altogether. Sure, you can become just as knowledgeable on your own through your own research and personal experience. But many decide to pay for a mentoring or education program because it significantly compresses the learning curve. If you could become an expert in two years on your own, would it be worth paying someone to get you there in six months? For many, the answer is yes.

Typical investment in a multi-family syndication is $50,000. I got in my first for $25,000. Sometimes they reduce the minimum if you've built a relationship with the sponsor and it's your first time. 

 I'd recommend the Sumrok event too. It's pretty cheap for a full two days of knowledge. I'm not going myself, but only because I've already gone a number of times. It's worthwhile if you're looking to get started in multi-family. 

Check out Brad Sumrok....he has a weekend event coming up that you can attend virtually and is a good way to learn how to get started in multi-family. Even if you decide that program isn't for you, I do recommend getting a mentor of some type, someone who has already done what you want to do. Under normal times I'd suggest going to some multi-family meetups and meeting some investors in person. Obviously, things are different now. There are so many groups here in Texas, and some of them hold webinars since there aren't many live events right now. I can direct you to some Facebook groups and podcasts that could be helpful if you send me a message. 

I think going into multi-family is the way to go when you have six figures in cash available to invest. 

You might consider multi-family at your income level. If you can put away $7,000 a month you can afford to do multi-family, and there are many advantages over single family.

I didn't think there was going to be a bus tour (due to concerns of crowding everyone on a bus)....but when there is one, yes, I'd say it's worthwhile. If you're new to multi-family, or if you have experience, but in another market, it is valuable to see the types of properties that his students buy. I'm not going this weekend, but only because I've already gone to the event many other times. It's definitely a good weekend for anyone looking to get into multi-family.

Sumrok is strictly for multifamily 60 units and up. Some students apply the principles to smaller properties, but there are disadvantages to working at a smaller scale, so it’s not too common. I’m only speaking about the program I know firsthand. If you were here in Texas I could suggest some mentors for smaller properties, but I can’t be as much help in your area. If it weren’t for COVID, there would surely be networking events in your area where you could get suggestions and references for a local mentor.

I haven't been to the Bawa bootcamp, so I can't speak about it. He does provide a bunch of free content that is valuable, but I don't know if you could really start from the beginning and buy a multi-family property just with his free videos...much of it is intended for people already in the game. The bootcamp is a few thousand dollars I think, so I would definitely recommend getting references from others who have attended.

I can speak about Sumrok, because I am a student, and yes, I do think the program is a great way for someone without experience to become a multi-family investor. You should check out one of his weekend events because it's a cheap way to learn all about the program, and meet existing students to hear about their experience, without a high-pressure sales pitch.

While I can recognize the obvious benefits of owning property on your own without partners, why do you want to keep it below 20 units? Is it because you can only afford to spend a certain amount on a property? The reason that Sumrok students buy larger properties is that professional management is much more feasible above 60 units. It is very hard to do it economically with only 20 units. 

 I am surprised there aren't more posts like this one. Yeah, we're good with numbers. But really, many of us recognize the ceiling in our careers and start looking for other ways to make money.