I'm a new investor, no real estate experience, looking to get started in multi-family investing, and one of the things I'd like to get good at is learning how to evaluate a property and determine if it's a good buy.
I'd like to ask what are some resources you use (software, books, etc) or how I can learn to improve my ability to evaluate multi-unit properties.
I would advise starting with all the info under the "Learn" tab at the top of the biggerpockets page. Then, for specific info on multi family investing read “Insider Secrets to Financing Your Real Estate Investments” by Frank Gallinelli.
I would highly recommend Frank's other book, "What Every Real Estate Investor Needs to Know About Cash Flow". It was one of the first books that I read and it helped me understand how to create a profit and loss statement.
I'm also new and have just finished reading Ken McElroy's books, in which he goes into great detail about multifamily housing and how to do it right. Fantastic stuff...although next I want to do some intense market research to see just how attractive multifamily is today and might be in the future compared to when he wrote the books (they're maybe 10 years old).
An excellent choice for learning commercial real estate is Ray Alcorn's Deal Makers Guide. It is more expensive about $500 but it is really good.
The best you will find for evaluating commercial properties is the CCIM training. That will cost you a few hundred for the introductory class and several thousand to go through the whole program.
Welcome to BP.
Having a CCIM designation is the best in the market today. Also, books like what every real estate investor needs to know about cash flow is a great asset to have.
Hope it helps.
I agree with both @Ned Carey and @James Syed , the CCIM classes are excellent. The classes are expensive but you also receive cash flow analysis spreadsheets/software with them. Nothing beats analyzing (even if just for practice) income/expenses of multifamily properties. I've worked on more than 100 multifamily appraisals and it definitely takes time to learn what typical expenses are and if a operations can be improved. Since the NOI is what drives the value of a multifamily property, I think your time is best spent learning and understanding each of the income and expense line items. Some people use the 50% rule for determining expenses. I would be extremely cautious in using something this simple to determine expenses for an apartment building. Feel free to contact me directly if you have any questions. Best of luck.
Thank you @Jean Bolger , @Jeff Arndt, @Ned Carey , @James Syed @Brendan K.! I will definitely look into the CCIM classes and the books you all recommended!
@Dan B. I found the best and simplest book that explained how to properly evaluate multifamily deals is "The Complete Guide to Buying and Selling Apartment Buildings" by Steve Berges. Everything mentioned above is also an excellent source of information.
CCIM courses are definitely top notch when it comes to evaluating the financials of a deal and you can browse them at www.CCIM.com
IREM courses and books are also great information and deal more with the management and operation of the property. www.IREM.org
Ken McElroy is doing some great syndication investments, which is invaluable to learn about as you look for larger properties. His books and website are a good source of info as stated above.
Also, @Ned Carey mentioned Ray Alcorn's guide. His info is very in depth and covers so much about the due diligence process, it will be invaluable info once you have something under contract.
Welcome @Dan B.
as pointed out above ; there is a wealth of good information on this site. For book , McAvoys are a great place to start , I have also found that Steve Berges books are great for analyzing multifamilys as well.
One tip that I picked up here is while you are starting out and saving money for your investments, start driving / visiting areas you would like to invest in so you get a feel for prices, rents , house conditions etc, and visit and look at lots of homes and open houses so your eye get used to looking at repairs / upgrades that are normal in a particular market. I really dont think you can look at too many properties, and the more you look, the more knowledge you will gain for that market