Should I use a professional multifamily investment adviser group?

Question

Joseph Gozlan · Answer

@Michael Bracken

What I do (regardless of deal size) is stick to the basic rules of real estate:

1) Make you money when you buy

2) location, location, location - after all that's the one thing that you can not change about a property

3) Cashflow, Cashflow, Cashflow - hope is not a strategy!

4) Real estate investment and wealth building is a long game - flipping is a job, investing is wealth building.

Sticking to these rules will help you avoid a lot of mistakes.

Joseph Gozlan · Answer

@Michael Bracken I would highly recommend that you do get some help.

I personally did not join any of the "guru" groups out there and still survived it. I DID however have a great team assembled around me from the lawyers to the property management, lenders, etc.

If you're looking for some guidance, I'm sure I can find some time to chat and give you some pointers. If you're looking for more of a "hand holding" deal I'm not sure I'll have time for that but you can go to some of the local MF meetups and meet, network and maybe even find a coach or a partner.

Either way, be careful because we're at the top (or close to it) and if you miss on real estate rule #1 (make your money when you buy) it could be very painful.

Oh, and before anyone jumps on me, "location, location, location" is rule #2 in my book :-)

Jeff B. · Answer

While there are difference between SFRs and MFUs, your first hurdle is rental management - - have you ever?  If not, I recommend you take at lease a year of managing a SFR, at least through one lease renewal cycle.  You need various forms, accounting software and to become familiar with Fair Housing regs.  Starting off with a 10unit and no experience will expose you to making 10 simultaneous mistakes at a time instead of learning to swim in the shallow end of the pool.

John Jacobus · Answer

@Michael Bracken The key is finding experienced partners who have successfully analyzed, acquired and managed properties that you aspire to own.  While multifamily investment groups can be a good source of experience partners, it's not the only place to look for the expertise and advice that you seek.  Consider consulting with a mortgage broker to gather a conservative perspective on your underwriting, review your business plan and pro-forma with a local property manager who has experience managing properties of similar type, class and location, and/or build relationships with local deal sponsors and operators by attending local REI events or meet-ups.

Michael Bracken · Answer

Let's get down to it. See you Wendsday. ; )

Michael Bracken · Answer

@Joseph Gozlan I would like to talk some time. I've been invited to meet with a property management firm in the area just to talk and learn from them. I'm gonna officially abandon my plan for a 10 plex out of state. A local 4 plex will be nothing to sneeze at for where I'm at. That will be a challenge in this area right now especially to work in professional management. It will be a great learning experience.

Plan:

(a) I've applied to the Veterans Commission for paperwork to get my 5 years no franchise tax LLC.

(b) Cozy up to a local credit union to refi cash out two properties.

(c) Receive conventional financing from credit union from 4 plex.

(c) Use MLS and compile list of properties and cold call (I've done with success) owners.

(d) Interview Property Managers

(e) Purchase property. Since I like to talk and have been in business in the area for years I already have a business CPA, real estate contract attorney, contractors and friends that do local fix and flip full time. What could go wrong??

Michael Bracken · Answer

@Jeff B. That's right. I have a SFR I've managed for years but you know what? The tenants have all been great. I can count the mistakes I've made on 1 hand. I need to count on two!

Should I use a professional multifamily investment adviser group?

Most Popular Reply