How much Knowledge do you need to buy apartment buildings?

Question

Is it better to just do your Due diligence then  start and learn as you go when getting into commercial Real-estate (buying say an apartment building)? or is schooling required? My other ventures I try to find people that are doing what I want to do and try to build a relationship with them and learn from them.

Brad Hayden · Answer

@Marshall Bledsoe, commercial real estate can be exciting and lucrative, but it can be complex and risky if you don't know what you are doing. One deal can change your life … for better or for worse …

Learn the basics first, then start networking with others who are already doing what you want to do. Find people that you can work for, learn from, partner with, and leverage their experience and network of resources.

Start with small deals, maybe partner with a more experienced investor to build your track record. Commercial lenders will look closely at the property, but they will also pay significant attention to the experience and financial capabilities of the sponsor(s).

Don't hesitate to follow up and ask for additional help.

Andrew Moore · Answer

Couldn't agree more with @Brad Hayden.

I believe the most successful people in the space are constantly learning, and sharpening their skills. You absolutely need to go to "school" to get a base level of understanding on how commercial real estate works. However, I don't think it necessarily needs to be a formal education. Listen to podcasts around the topic, find resources online to help you understand how to analyze deals. Below are a few resources I've found useful over the years.

Crushing It in Apartments and Commercial Real Estate by Brian Murray - this will be a great overview of various aspects of the process; from analyzing deals to operating and expanding.

Real Estate Finance & Investments by Brueggeman & Fisher - This is a textbook. It is much more technical & looks at everything from financing development to valuing & analyzing income-producing assets.

Adventures in Commercial Real Estate - They have a lot of content around commercial real estate. There are tons of free resources both on the site & their youtube channel as well.

Just a few suggestions, but more importantly, just start learning. Engage with other people so using the language of commercial real estate feels & sounds more natural.

Best of luck!

Paul Moore · Answer

Hi @Marshall Bledsoe. Great question.  For me, as a 50-something and a formal serial entrepreneur, it is way too risky to learn as you go.  There are so many ways to lose everything including time, health, and relationships.

I’ve done a series of Biggerpockets FB live and Instagram videos exploring 7 paths to learn the commercial real estate space (including multifamily).  I also detail this in the final 1/3rd of my BP book on storage.  I hope that helps!

Marshall Bledsoe · Answer

Thanks your name is cool also ,Marshall Magnus , Sounds like a wizard I like it . How long you been in the business?

Marshall Magnus · Answer

Hi @Marshall Bledsoe

Congratulations on the cool name! And also on moving into the apartment space! Good luck

Lien Vuong · Answer

You can try working for a Property Management company that manages large buildings like that and you will learn very quickly the dos and donts of investing. Agency is another method but higher risk because you're not getting paid while doing it.

Jay Thomas · Answer

Hi Marshall! Wow. congrats on deciding to go into apartment building ownerships!

If you are not a Real Estate Agent, then I would recommend going to school for it or at least working with an agent that has plenty of experience in the field.

Bigger Pockets has great tools for you to use in order to vet the property and see if it is worth it. Do as much research as you can about what goes into maintaining and fixing up a complex. Research the are and see the need and pricing of rent and such.

Good Luck!

Marshall Bledsoe · Answer

@Kyle Moody As of now sweat equity but I'm interested in being more Passive.

Kyle Moody · Answer

Marshall,

Are you looking to be arms-length as the passive investor or are you looking to put in sweat equity into the/any project?

Marshall Bledsoe · Answer

Lien Vuong   Thanks for the advise Ill have to look into it,but Idk if I can do it and not get paid guess it's according to when and for how long like I said Ill have to look into it Thanks

How much Knowledge do you need to buy apartment buildings?

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