Finding My First Multifamily

[Patrick McCain]

Hello!

I have been reading the forums intently for about a year now, and I am finally about ready to make my first move into multifamily real estate. I have will have 100k in cash to invest at the end of this month, and based on everything I have read, I think I am most interested in a multifamily (12+ units), in a smaller city with growth potential. I would want to put 25% down, so my cap is likely 400k, and I have some cash in reserve for unexpected expenses. I am based in Denver, but I think it is unlikely that I will find anything in this range in the area.

For the most part I have been looking on sites such as Loopnet to see what is available in various markets, but I am sure this is not ideal. Does anyone have any strategies they can recommend for searching for a smallish multifamily in my price range?

Thanks!

[Theo Hicks]

Hi Patrick,

I would create a list of all the commercial real estate brokers in your market (or in a different market if you don't want to invest in Denver). Contact them and tell them what you are looking for. Ask them to send you any deals that meet your criteria.

Now, one of the challenges you will face is your lack of experience. Brokers want to work with investors who can close on deals (because that's how they get paid). So, I would recommend finding a property management company first and speaking with a lender/mortgage broker to confirm that you can qualify for financing. That way, when you speak to brokers, you can tell them that you have the capital to close, a lender/mortgage broker for financing, and a firm to manage the deal.