{"id":96736,"date":"2019-11-01T09:00:40","date_gmt":"2019-11-01T15:00:40","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=96736"},"modified":"2021-03-16T13:49:14","modified_gmt":"2021-03-16T19:49:14","slug":"how-i-plan-on-getting-to-1000-units","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-i-plan-on-getting-to-1000-units","title":{"rendered":"Here’s How I Plan to Get From 83 to 1,000 Rental Units"},"content":{"rendered":"

With 83 doors, I\u2019m currently a long way away from my goal of 1,000. Since purchasing one large multifamily, I\u2019ve gained valuable experience in operating an apartment complex. Most components to building a multifamily business are universally necessary.<\/p>\n

Anyone who owns a property with 75-100 units, ultimately realizes that the economies of scale favor larger properties. Leveraging operating costs is a valuable tool to maximize profits. I\u2019m looking for bigger deals, but I’m open to smaller ones too.<\/p>\n

I’m Planning to Buy Right<\/h2>\n

I was out to dinner with a commercial<\/a> developer last week. He said something that resonated with me: \u201cYou don\u2019t make money the day you sell, you make the money the day you buy.\u201d True. But buying for the right price implies acquiring good debt at a favorable rate.<\/p>\n

In the past 30 days, we\u2019ve seen a spike in mortgage rates as the 10-year treasury has been lifted to three-year highs. This move implies that cap rates are going to be compressed and possibly move up to correlate with the increased cost of borrowing. This hasn\u2019t happened quite yet, but I\u2019m anticipating this move.<\/p>\n

Borrowing from lenders just got more expensive. Hypothetically, if asset prices do not move in tandem with the rise in interest rates, net cash flow numbers will decrease. I\u2019m preparing to bring extra equity to secure favorable loans. In a market with rising rates, a low-interest-rate assumable loan can become a tool to negotiate with.<\/p>\n

Related:<\/strong>\u00a0How to Use Commercial Real Estate to Add $1M to Your Net Worth in 5 Years<\/a><\/em><\/p>\n

You need to be able to speak with lenders and always be willing to negotiate. Reaching out to lenders now is a terrific idea, and one that I\u2019m actively pursuing. Finding competitive loans in this environment can be crucial to adding value to deals.<\/p>\n

I make it a habit to call lenders throughout the week to simply give them a wink and a nod for when a deal emerges. Leverage can be a powerful tool if used correctly. When used improperly, it can be a catalyst for financial ruin. If interest rates continues to rise, smart debt with a reputable lender can make life much easier. Get those ducks in a row now.<\/p>\n

\"lender-negotiating\"<\/p>\n

Property Management Choice Is Vital<\/h2>\n

Property management is the engine that keeps the machine running. Bad property management can create nightmares. Solid property management can become a gold mine to scale with. After prospecting an area, I sift through the property management companies on Google and ask brokers for recommendations.<\/p>\n

Once a few have been chosen as candidates, I like to call the properties they manage and pretend I am a prospective tenant. It’s a test to see first-hand what the process entails. The way a property management company handles customer experience and tenant showings is vital. I investigate as much as possible before making a choice.<\/p>\n

Brokers Can be Your Best Source to Find Deals<\/h2>\n

Brokers are a key component of the team. I\u2019m a firm believer in consistently reaching out to brokers to remind them you\u2019re there. They are the marketing boots on the ground to bring you listings before they reach the masses.<\/p>\n

Half of my property-seeking days are spent reaching out to brokers and reminding them that I\u2019m looking. I also reinforce my criteria so that a clear and concise product is in mind for the broker. As is the case with most multifamily players in this market, money isn\u2019t the problem right now, deals are.<\/p>\n

\"phone-calling-brokers\"<\/p>\n

Consistently Making Offers Has to Become Habit<\/h2>\n

I tend to have very strict underwriting guidelines and have room for improvement here. I take a risk-averse strategy that probably excludes doable deals. It insures success on the executed deals. In this market, deals aren\u2019t there for the taking the way they were in the past.<\/p>\n

An investor has to have a coherent strategy for finding off-market deals or having brokers bring them deals. Aimlessly hoping deals will fall in my lap is not a winning strategy. Reaching out to brokers and reminding them of buying criteria is an excellent thing to do. I am striving to do more of this every week. The chances of getting a deal done are proportional to the amount of deals analyzed. The amount of offers are proportional to the latter.<\/p>\n

Related:<\/strong> Don\u2019t Assume Commercial Investing is Out of Your Reach<\/a><\/em><\/p>\n

This Is a Marathon, Not a Sprint<\/h2>\n

Volatility can happen any time in a real estate market. With so much uncertainty, I\u2019m reverting to my poker days of being a grinder. You must be patient and avoid mistakes. Real estate is a war of attrition, and mistakes can become illiquid sizable setbacks.<\/p>\n

\"ad-agent-directory\"<\/p>\n

How do you plan to increase your number of units?<\/em><\/p>\n

Share in the comments below!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The real estate market can be volatile, which makes it difficult to get deals done. Here’s how I plan to stay on the up and up and keep adding more and more doors to my portfolio. <\/p>\n","protected":false},"author":265133,"featured_media":115307,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5183],"tags":[],"class_list":["post-96736","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-landlording"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/96736","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/265133"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=96736"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/96736\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/115307"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=96736"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=96736"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=96736"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}