Investor · Sf Bay Area · Member since 2021 · 90 posts · 41 votes
I have a simple straightforward question for you bp folks:
If you wanted to become an expert at analyzing small, medium and large multifamily properties as well as commercial property potential investments what would be your path to getting there from beginning to end.
Chattanooga, TN · Member since 2021 · 23 posts · 18 votes
4y
I would think a lot has to do with your end goals. How you analyze small multifamily including the loan products and what goes into the underwriting is very different than large multifamily which is different than what goes into commercial loans. You may want to pick one and pursue it for a while and once you either find yourself really good at it or find yourself not interested in that investment vehicle, then go to the next one. If you are looking for possible employment opportunities, then many of the larger syndicators have been higher investment analyst lately. You could also work for a lending institution. If you are looking to grow on your own, then I would recommend finding a mentor or joining a program for someone to help guide you along your journey. Good Luck!
Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes
4y
I see a case of analysis paralysis coming on. Is your goal to be an expert at analyzing deals or actually own the deals? There is a difference. One keeps you busy geeking out in front of a computer all day. One makes money (hopefully).
You can't be an expert in the analysis without actually doing the work, either for yourself or with someone else. You can learn from others and feel like you are a genius surfing spreadsheets because the sheet always works if it never bumps into reality. Buy something from your sheet model for yourself, with a partner or with a company and see what a real property is like. Operate the real property and you will see what real maintenance is like. You will gradually get better as you go through the model-->purchase-->operate cycle if you intend to be a buy & hold investor.
Your posting asked for advice on becoming an expert in the full spectrum of multi-family and commercial properties. That is too broad to start. Commercial is very different from residential. Small residential is very different from large residential. It looks like you are doing the equivalent of asking someone to teach you to be an expert in all languages when you know only one. For your real estate starting point, pick just one of those areas and stay there for a while, long enough to learn it well. Make small mistakes with small investments in small properties to start. You can partner with someone more experienced on bigger projects if that is what you want to do, but start small to establish your foundation knowledge first.
thanks for the information very helpful. I currently own 4 sfh properties in california and texas, but Im trying to get into medium size ( 5-50 units) multi family space in the near future. Ultimately I want to be so good at underwriting by the time I am looking for deals for myself I can spot a good or bad deal fairly quickly at least from a mathematical standpoint. I know some things come from experience but I have to start somewhere. Someone thing tells me to find a mentor or someone who has done what I've done already have them take me under there wing and maybe work for them for free or bring something to the table for them somehow to further my education in underwriting
I recommend making you own analysis spreadsheet. You will learn a lot by doing so and you will develop an intuitive sense of how things work. I haven’t read many RE investing books, so there are probably better ones available, but I used a book by Gallenelli called What every RE investor needs to know about cash flow.
I suggest making an APOD. It's easy. This will give you a snapshot of the investment. You can google it.
You can use the APOD to create a 5-year projections spreadsheet. Also easy.
Then, you can analyze it using a DCF analysis. This one would be hard to make from scratch, so you should download one from Google.
Real Estate Agent · Destin, FL · Member since 2019 · 116 posts · 111 votes
4y
Analyze lots of deals. I would also find a few groups or maybe a mentor who is fluent in what you are trying to do. We get a ton of good information and network with great people at our local REI meetups. The more familiar you get with the market and numbers the more confident you will be in your deals.
thanks for the information very helpful. I currently own 4 sfh properties in california and texas, but Im trying to get into medium size ( 5-50 units) multi family space in the near future. Ultimately I want to be so good at underwriting by the time I am looking for deals for myself I can spot a good or bad deal fairly quickly at least from a mathematical standpoint. I know some things come from experience but I have to start somewhere. Someone thing tells me to find a mentor or someone who has done what I've done already have them take me under there wing and maybe work for them for free or bring something to the table for them somehow to further my education in underwriting
There is a great networking zoom event tomorrow at 12PM PT. Paul Krause an EXP Agent and is buying and flipping properties in CA, AZ, TX IL. He has taught me a lot! I am happy to email his link if you want to learn writing and analyzing deals and offers.
Rental Property Investor · DC Area · Member since 2019 · 100 posts · 54 votes
4y
@Patrick Thomas Dickinson Here are some options that helped me: Enroll in an online courses that focuses on underwriting commercial RE deals, some start with super Excel basics. Join underwriting-focused Zoom calls/meetups, and network with people focused on the same thing you are. Read underwriting-focused books, in particular I recommend Rob Beardsley's.
I have a simple straightforward question for you bp folks:
If you wanted to become an expert at analyzing small, medium and large multifamily properties as well as commercial property potential investments what would be your path to getting there from beginning to end.