All Forum Posts by: Sean Na

Welcome @Nicholas Meyer!

Thank you for sharing your story.  1st goal: Capital Preservation.  2nd goal: cash flow.  3rd goal: grow that nest egg.  Before you start thinking about what to invest in, start by asking yourself the following:

1) Do you have the time and bandwidth to execute you real estate investing business plan? 

2) Do you have the skills and experience to successfully execute a real estate investing plan? 

3) Do you have to be the one quarterbacking the plan or do you feel comfortable with someone else making busines decisions on your behalf?  

After you answer these questions, you can start considering what to invest in and where.  I personally like investing in B and C class apartment communities in high growth markets (population and jobs).  Why?  Because this product, as long as you secure long term debt, will give you steady cash flow, appreciate, and provide a ton of great tax-saving benefits.  

Hi @Robert Arroyo

I am a recent transplant from Southern CA.  I moved my real estate business from CA to Dallas.  I was "late to the party" as prices are up here too.. but real estate still cash flows here and I've purchased SFRs to fix/flip, SFRs to rent, 2-4 units, invested passively into larger apartment syndications, and have also sponsored 2 larger apartment deals totaling 400+ units and now on my 3rd one.  If you have hustle, time, a special skill set, liquidity, net worth, or a combination of any of these three you can start playing in the multifamily syndication space.  Between the different investments I've made here, the most gratifying and lucrative has been larger multifamily by far.  I am in the process of selling all my small stuff.  Ugh.

Greetings @Rick Robles

If you know you want to scale your business after a few years into buying larger properties, there really is not good reason to wait.  If your bread and butter is buying smaller properties, then by all means continue doing so.  But you can start educating yourself on how to start putting larger deals together through partnerships and syndication.  You can go big and fast now ; )  

A lot of good input here on this thread.  Really no wrong way to approach it.. rather, it is going to depend on your situation and preference.. ask yourself if 1) you have the time and bandwidth to quarterback your own real estate investing business plan, 2) Do you have the experience and/or skill sets to execute the plan, and 3) Is it a MUST that you quarterback the business plan or do feel comfortable with someone else making business decisions for you? 

Start by answering these questions, then decide if you want to be an active or passive investor.  Good luck and happy investing!

I've found that larger (80-units or more) apartment deals that come from wholesalers are usually a waste of time - mainly because the financials (like T12s, Rent Rolls, etc) are incomplete.  Because of extensive financials you need to properly underwrite a deal, I have found that developing relationships with the top brokers in your market(s) is a better investment of time/resources than talking with wholesalers.. Multifamily brokers certainly earn their commission and it is worth working with them.

Good question, Gabriel.  The hypothetical $125k you have would be 20% of a 6.25m purchase.  The only challenge with that lenders are starting to cap their max LTVs at 70-75%.  

You'll also have to show liquidity after close.. The liquidity requirement varies from lender to lender, but  the general rule is 10% to 20% of the loan amount.. so, If you’re wanting to borrow a million dollars, you have to have at least $100,000 after closing; $150,000 or $200,000 is even better.  Other times lenders may require 6 to 12 months worth of principal and interest payment. If the monthly payment is $10,000, for example, a lender may want to see $120,000 in liquidity.

Also, for Net Worth, they will want to see a net worth equal to or greater than the loan amount.

The best thing I did when I got into multifamily investing was teaming up with more experienced people.  I had some liquidity and time, so I hustled and got in with more experienced guys who were able to bring track record to the table (An agency lender will not lend to you, no matter how much money you have, unless you or someone on the team has experience with multifamily). 

So, rather than trying to go and secure your first apartment deal alone, I'd team up with others..

I would start with education.. of course, various posts in the BP forums is one place to start.  I would then get out to local real estate MeetUps, Real Estate Investment seminars and conferences.  Finally, I would connect with a mentor - whether you have to pay or can find one to mentor you for free.   Good luck!