I quit my CPA Job to buy Large Apartment Buildings

370 Replies

Hi Brian, 

Awesome post and tons of valuable information. I am also a CPA. I currently work in a role auditing alternative investment companies (brokers and trading advisors in the futures and swaps fields). Although the role teaches me a lot, it doesn't provide knowledge specific to what I would like to do in life.

I have an entrepreneurial spirit and recently developed a strong interest in REI. I've been doing a lot of research and attending events. The subject matter interests me much more than my current role.

Would you be able to provide a suggestion, maybe what you would do in my situation? What type of career move would you make? Would you continue working in accounting or move into an entirely different career to get real estate experience faster? If so, what positions and types of companies would be best.

 I don't have much money saved up, but do not want to spend too much time in a position which is not in alignment with my goals. I hear a lot of talk about starting to invest in real estate with little or no money. Is that possible? I've also considered specializing in real estate accounting and offering services, but I am not sure if I would like preparing taxes returns. 

Thank you

@Brian 

Thank you for all the great advance you have given use on this wonderful blog. 

Me and my partner want to start investing in apartment buildings and renting them out. We are starting on a entry level with neither of us having any experience in this field. But we both have the ambition to succeed. 

Thus, my questions are; how do we start investing in this field? Where do we start? Also my partner and I have excellent credit. Would it be wise to use our credit to gain capital to buy our first apartment building? And should we buy our first apartment building in California or in a state with better growth?

@Kate J. I did not have millions or even funds close to a million when I first started.

What I was able to do, and strongly believe anyone can do this, is to leverage my network or what I call my "circle of influence".

I worked hard and continue to develop investor relationships. The focus wasn't about me asking the investor for money to invest in the deal.

It was cultivating a meaningful relationship built on trust, credibility and authenticity.

The short version, is say what you mean and mean what you say. Set reasonable expectations and do whatever it takes to deliver.

There will be many challenges and roadblocks on this journey.  

Keep after it!!

@Julius Lewiel @Markese Clark since you both are starting out, and I know I covered this somewhere in this very long thread, you need to know with 100% focus and clarity your "WHY".

I strongly believe it is very important to educate yourself on the many niches in real estate such as flipping, wholesale, BRRRR, multi's, storage, etc.

However, if you don't know your "WHY" or the reason you want to be a real estate investor, you will, and based my own experience, spin yourself in a circle and get VERY frustrated.

As a CPA I was working 100+ hour work weeks during tax season. During the busy tax season I would see my wife and girls about 10 minutes a day and was working 7 days a week.

This was an awakening for me as my goal in life has been to consistently determine how I can be of best service to others.

I realized I was giving my “best service” to the corporate world and what was left over to my wife and girls.

The thought of spending so much time working and then missing out on my kids’ childhood and growing up really troubled me. I remember thinking, what if my girls think I’m a terrible parent and Daddy is never around...

This weighed on my mind constantly. The reason I spent so much time working in the first place, and most likely true in your situation, is to earn enough money to support our family and provide a nice lifestyle.

Some of my best business mentors told me that, given a second chance, they would have spent more time with their families and less time working. 

To bring this full circle and to get to my WHY - I decided to acknowledge how I was feeling, ponder the advice offered by my colleagues and wife and explore what life could look like if I left the CPA world.

After this awakening, and taking the PAIN of something I didn't want, I added emotion and clarity to the life I was seeking and desired.

I made the decision to make a change and felt I needed to do something fast before my girls got much older.

This success journey didn't happen over night and there were many long days and nights.

What you need to do is focus on your "WHY" or "Purpose" or "Inner-Game" or "Whatever is gonna keep you motivated".

Regarding your tactical questions on where to start and career advice, use BP, network, build your own circle of influence.

Most people give up and I was close so many times to throw in the towel. 

If your WHY is strong enough you will persevere!!

@Brian Adams It is pretty interesting that this post is 3 years old. I have read the comments a few times, off and on, and as a CPA also, I will say that you're an inspiration. It's for sure, all about the "why". 

Hi Brian, you are a true inspiration and we are grateful for your advice based on your experience and success. A few questions for you regarding rehabs...

1) How do you manage the rehabs from afar?  

2) Does your PM manage this or do you find a local GC you trust to manage it?  

3) Do you renovate on turn?  

4) What is your system for keeping the GC on track? Have you ever been burned by a GC that caused a bunch of overruns and time delays...how did you manage it?  How do you thoroughly vet a GC so you avoid the headache of construction defect/over cost issues?

5) MOST IMPORTANT QUESTION...Any advice for someone who has two small children and less time because both parents have demanding jobs.  How can we get started in multifamily investing?

Thanks!

Linda

@Linda Thompson , thank you for your kind words.

For rehabs, my PM gathers bids where I approve. I am really involved in my deals and the PM oversees the GC and we speak often. 

Yes - the GC has gone over and we have a pretty stiff contract if they don't deliver.

I often travel to the asset to oversee progress on the projects.

We upgrade units on vacant turns. 

When I first started my girls were 4 and 2 and during tax season I was working 100+ hours AND my wife worked full-time. I sure don't miss those days.

I shared many times in this thread, I was really clear on my WHY or my outcome. 

My passion, desire and focus drove me to get out of bed early or stay up late to build my business. I knew what I wanted. Did everything go as planned on this journey...NOPE.

This multifamily biz is really two things when you look at it high-level - Deals and Dollars.

If you are just starting out, think through how can you use your strengths to add value to someone else who is at a place where you want to be. Maybe you can locate awesome deals or maybe you have a solid list of potential investors. 

Linda, in my opinion, with the right mindset or what I call the "inner-game", aligning your:

  • Head - Imaging what is possible 
  • Heart - Connecting your purpose
  • Gut - Trusting yourself

Anything is possible as I know it to be true in my situation.

Good luck!!

Brian,

You truly are amazing and one of those one of a kind mentors!  I'm so inspired by what you have accomplished with two young children and so little time.  We may invest in one of your deals to learn the ropes.  Thank you for inspiring us first timers to take action!

Linda

Hi Brian,

Last two questions.... 

1) Are you able to keep 100% ownership of your properties after you refinance and pay out your investors their IRR or are you required to sell the asset after a certain period per your partnership agreement?

2) If you are able to keep it as part of your personal portfolio, are investors ok with this or is this an issue for them?

Thanks for the info!

Linda

Hi Brian,

Long term question for you...You mentioned that your ultimate goal is $50K/mo in cash flow for you and your family.  How are you able to get there if you are selling these assets every 2-5 years and not holding them for long-term cash flow?  Am I missing something?

My long-term goal is to hold assets that can generate enough cash flow that we can retire comfortably.  Can you do this in the apartment syndication business?

Sorry to bother you with so many question.  Your responses have been so helpful to me!

Thank you in advance, 

Linda

This post has been removed.

Bought 550 doors last year for $24.5 million

Going under contract to sell a year later at $36 million

Crazy market and life is so F'ing awesome!!

I think most people expect the COVID-19 (Coronavirus) to have major impacts on real estate.

I haven't bought any deals since 2018 as the market has been way overpriced. 

Hopefully, some great deals will come my way - targeting to acquire 5,000 doors.


@Linda Thompson looks like I never answered your question.

Most of my deals have been value-add where there was poor management, low occupancy, deferred maintenance, low rents, and high expenses.

With this set of facts, the property didn't cash flow on day 1 or 6 to 8 months after acquisition.

When the asset was sold, after the property was fixed up and rents were increased, any deferred cash flow and profits were paid out. So if you are the sponsor of the deal, you do need to plan from a cash flow management perspective that your cash could come in the future in a lump sum. 

To answer your question, with proper planning, YES - you can generate enough cash flow in syndication deals.

In our current market though, my belief is to focus on solid cash flow deals, be prudent and financially disciplined in underwriting (financial analysis).

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