5 WAYS TO GET STARTED IN MULTIFAMILY INVESTING
Plus An Easier Way
So, you want to get started investing in multifamily properties. You see the benefits. You think this will be a better investment. But, how do you get started?
1. DO IT YOURSELF.
If you are someone who is bold and works well alone and doesn’t want the hassles of partners, you can get into multifamily by doing it yourself.
Go online and learn all that you can. Go to some conferences or workshops and meet other multifamily operators.
Search for multifamily properties, anything from duplexes, triplexes, quads, 5 units, 8 units, 16 units, 50 units, on up.
All that holds you back is your own confidence, your own capital, your own determination.
We know quite a few people who got started by doing it themselves, without any partners. Perhaps this is for you.
2. WORK YOUR WAY UP.
Some people think they have to start with single-family investments. This can be helpful for learning how real estate investments work, finding working capital, understanding the local market, and gaining confidence.
It is also a good way to build capital over time, one step at a time until you have enough to purchase your first multifamily property.
But, we know many people who skipped single-family and smaller investments and were able to jump into multifamily quite successfully. My first real estate deal was a 30-space mobile home park in Tampa, which I bought with my sisters and father back in the 1970s. We did very well on this.
What do you think will work for you?
3. LOCATE SOMEONE WITH DEEP POCKETS.
We have a friend who invests in multifamily properties as a solo investor. Sort of. He does not like being a part of a partnership. He does his investing all by himself. Except, he happens to have someone with deep pockets who trusts him and makes capital available for his investments.
This might be something you consider. Find one person who trusts you and has plenty of capital to fund your investments. Then go make that person and yourself a good return on your investments with apartments.
Do you know someone with deep pockets?
4. FIND A PARTNER OR TWO.
Our preference for getting started in our multifamily investment was to partner up with a few others.
We participated in training experiences and local meet-up groups. We met some people with whom we felt comfortable. We spent some time getting to know each other and our individual objectives and approaches to investing.
We formed a partnership and soon had our first large apartment complex.
These partnerships may go on for decades. Or there may be different partnerships for different investments.
We also chose to syndicate, which means finding other investment partners who helped us gather the capital needed for our large first investment property. We continued as managing partners and our syndication partners were passive investors.
What are some ways you can find a partner or two, link together, and do something you couldn’t do individually?
5. LINK UP WITH A MENTOR OR TEAM.
A very common way of getting into multifamily investing is by linking up with a mentor or a team of investors. There are several of these all over the country. They are sometimes called gurus.
These mentors of teams often put on conferences where they teach the skills needed to be multifamily investors. They offer year-long or longer mentorship opportunities.
Usually, these include getting together with a group of investors several times a year, linking up with some in the group when properties are found, becoming a part of a management team, and supporting one another as you learn by doing.
This is a very effective way many have found for getting into multifamily investments. The cost of these mentorships can be $20,000 a year or higher. Would this be something you would consider?
AN EASIER WAY
The above 5 ways to become a multifamily investor are for those who want to be active, want to be operators, and want to make this their business.
If this is you, spend a little time getting clear about your purpose in becoming an active investor in apartments. Then, choose an approach.
But, if you, like many, want to benefit from some of the potentially excellent returns on your investment but want to be more passive, here is another way.
Find an operator and become a passive partner.
Be sure to get to know this person or group very well. Do your due diligence on them. Check them out. Get to like them. Appreciate their approach and their character. What is their track record? Also, be sure that you trust them. This is so important if you are a passive investor.
We have more than a dozen passive investment partners in our current deals. We put in the work as general partners. The passive partners share in the risks and benefits of our multifamily properties, seeking an appropriate and good return on their investment, without the work.
HELP US GET TO KNOW YOU BETTER
What lessons have you learned that you are willing to share?
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Through the power of a syndication partnership with other investors like you, working with managing partners who are experienced in managing apartment complexes, you can own multifamily assets.
Or you can choose to loan money, get in with a clear return, and get out earlier.
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Harland leads our Investor Relations. He is a “repurposed” Pastor and Army Chaplain. He is an author, speaker, mastermind facilitator, and coach. Harland lives with his wife, Barbara, in DeLand, Florida.