All Forum Posts by: Rod Khleif

@Bryson Rogan

Hi Bryson. As @Todd Dexheimer mentioned educating yourself is key. Read books, listen to podcasts, and "drink through a fire hose" as quickly as you can to get started on the right foot. My second biggest tip for getting started would be to network, network, network! Real estate, especially multifamily, is a team sport and you won't be able to do this alone.

Attend a local Meetup group, meet brokers, meet local investors, and provide value in anyway possible. Several people said you should meet for coffee; do it! Lastly while you're educating and networking you need to be analyzing deals. Everyday you should be crunching numbers and familiarizing yourself with multifamily deals.

Looking forward to seeing you crush it in multifamily!

@Steven Fontes

Hi Steven, as others have mentioned you will surely have more turnover associated with the 1 bedroom units. Finding a good/long-term tenant is possible but the nature of 1 bedrooms simply turn more. An exception to this is areas that have a higher population of senior citizens. They are often on fixed income and only need a 1-bed.

To keep costs low at turn you can do things to "bullet-proof" the units. Have tile floors, same appliances, same paint color for all 4, etc. If you are leaning towards a duplex and the deal you're looking at doesn't work, keep looking!

@Pat Alford

Hey Pat, property management companies will not charge you a higher % based upon the rent amount. It is more so based on the size and class of the property. Keep in mind (and be prepared) that 1/1 units with low rents often have high turnover. Make sure to factor increased turnover, high repairs and maintenance, and bad debt into your analysis.

To answer your second question, yes profit/cash flow per door is one of many important figures to factor in. Ensure you really analyze the competition and that there is demand for 1/1 units in a rural area. Run some test ads on Craigslist, and if very rural, possibly even put out some "for rent" bandit signs leading up to the property. 

@Matt Rasich

Hi Matt, I can definitely share some insight as to how I'd suggest you get started after owning over 2,000 homes and apartment buildings. I'd avoid the condo and single family route, and if possible, "house hack" a plex to get started. Many successful investors I know and have interviewed on my show got started with a plex and now own hundreds or thousands of units.

If you didn't want to house hack a plex I'd suggest you get started with a small, 5-30 unit, multifamily. This size range has a lot of mom and pop sellers that you can often get into with seller financing.  

@Kyle Ferguson

Hi Kyle, thank you for the mention. When someone says they are "self managing" it means they do not have a third party property management company. If you are self managing a local triplex you may do all of the management and/or some maintenance yourself. When you get into self managing larger properties/portfolios, in your example 300 units, you would have a property manager and/or your own team in place. You would hire and manage them. They would perform all of the tasks a (for fee) property management company would perform. Ideally, you would hire for all of the required tasks/roles and focus on regularly working "on" the business and not "in" the business. Looking forward to seeing you crush it in multifamily!

@Sergio Fetter

Hi Sergio, first off there's a big difference between a market that's 100k population compared to that of 10k. Either way, when presenting the property and the market to your potential investors focus on showing them why it's a good/strong market, not convincing them as to why it's not bad.

Be sure to be prepared for any common objections/beliefs an investor may have in regards to small markets. Some points I suggest touching upon are:

- Population growth

- Multiple large employers

- Diverse employment opportunities

- Demand/low vacancy/rent growth

If you can show investors the above points and that although small, the market is stable and growing, you should not have a difficult time convincing them to invest.  

@Dennis Williams

Hi Dennis, great list you started and others have added onto. A few things I'd add to it are:

- Pet deposits & pet rent

- Reduce turn time

- Add washer & dryer hookups if possible

- Covered parking

- Depending on the location & market; rent one unit as a short term rental

- Reducing common area electric

@Chukwudi Motanya

Hi Chudi, a quick Google search for "top 10 employers __ county" will often pull up the list you're looking for. I suggest you also call the chamber of commerce as they will have this on hand and be able to quickly provide it to you.

As @Hadar Orkibi said, be sure to ask them if they know of any companies moving to town. Also ask them if any current employers are downsizing/moving out.

Lastly, Bestplaces.net is another great site to utilize for research/due diligence on a new market.

@Jerald A Wilks

Hi Jerald, creating a wait list doesn't hurt, and can save you time and money on advertising when a unit becomes available. Many people obviously won't stop looking for a place to live when you tell them you're fully occupied but some may go MTM at another property and want to move into yours when available.

Something to note is that it may be time to raise those rents! More tenants than units might mean you're under market.  

@Alan E.

Hi Alan, for the most part it's up to your personal preference. If the units are the same bed/bath count and square footage they'll most likely rent for the same amount. One thing to keep in mind is that some potential tenants may not be able to walk up the stairs, if elderly for example. Other than that choose which unit you prefer and remember moving in furniture is always harder when you need to climb stairs!