Hey Gang! This is my first but not last post for the community :-)
I have 7yrs of buy and hold SFR experience and wanted to ask the group if their are any prerequisites getting into mulftifamily investing? Things like a real estate and or broker license/background? Thanks in advance.... Michael
Are you trying to broker deals or are you wanting to buy an apartment building??
Hey Joel, yeah I should of clarified :-) buy a building ....
Pick a target market and learn everything you can about it. Get to know what properties are where, what the rents are, why people live where they do. Build a model for expenses that you can use as a "quick analysis" without using the supplied numbers.
Get to understand the areas well enough that you know what the basic rents are for each area. Do this be visiting apartments as a potential renter and tour them. Let the leasing agents try to sell it to you. They will always want your phone number so be prepared. I have a few lines from www.toktumi.com that can be used for various purposes.
Then shop, shop, and shop some more. Look at everything that comes available until you are calibrated to the process.
Get on every agents list that you can to have them send you deals. Call them on occasion to ensure that you are on their list. It is hard to get them to pay attention to you until you have done a transaction.
One thing to note is that if you are getting into deals considered commercial (i.e., 4 units and above), you go into a different lending category. The banks will start to require additional things from you, including that your personal net worth or the combined net worth of the partnership group is equal to or greater than the size of the loan on the property. This is an issue that can trip up unwary investors -- you may have a great deal, but you cannot get it financed because the ownership group lacks the net worth. So, to save yourself a lot of headache, shoot for deals that are within your net worth, or bring in other partners to boost the group's collective net worth.
Welcome to BP @Michael Esver . I don't think there are necessarily prerequisites from what I've gathered (no commercial real estate background other than 4-plexes), though participants in the commercial real estate space tend to be more sophisticated (e.g., professional). Given your seven years of experiene, I'd say you have all the knowledge necessary to analyze a deal assuming you've been successful. Especially considering you survived the recession. Good luck!
Thanks for the feedback everyone, very helpful!!!
Get the Ultimate Beginner's Guide
Sign up today to receive the popular eBook for free!