New investor looking for cash flow multi-family

8 Replies

Hello,

I'm starting to look at multi-family, apartment buildings as investments. However, I'm not sure where everyone starts their search? I do have a full-time job so I would like something turn-key or mild reno and that can be managed by a professional company. I'm from NJ and finding deals here on such properties is virtually impossible (I could be wrong), so I'm starting to look at more affordable and possibly cash flow positive investments in Dallas, Philadelphia, Raleigh area (on loopnet!). I have saved up for a down payment and could possibly get a commercial loan for about 800K. What do you guys recommend for

  1. First point of starting my search (loopnet?)
  2. Overall markets that you recommend for multi-family investment that can be handled long-distance Philly, Dallas, Houston, mid-west?. 

Thanks

Praful.

I'd recommend the mid west and I would look on loop net. But I would look reach out to the listing agents on loop net, build a relationship with them to get some deals before they hit loop net. 

@Praful S.   

What are your investment criteria?  This may dictate which markets you want to look at.

Do you have background in owning and operating multifamily?  If not, you may or may not want to start by owning long distance unless you have a good team in place.

I would start by establishing relationships with local brokers, which are a much better source of deals than loopnet. 

Dallas is good but very competitive.  Not sure about Houston after the hurricane.  I know there are some reports about post hurricane Houston.  

There are some solid midwest markets as well.   

@Praful S. , what are your goals for this investment?

How actively involved do you want to be?

If you are looking for a passive investment, have you considered joining a syndication?

Shoot me a note if you are interested and I can share how I got started.

@Praful S. I would only buy in areas that you know well. Randomly choosing a city without knowing what is going on in that area is very speculative. There could be good reasons someone is willing to sell a property cheap in PA NC or TX. Maybe new tax laws are going into effect, zoning changes, highway construction, etc. 

@Praful S.     I would be happy to spend some time on the phone discussing the Houston market. PM me if you would like to discuss.

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@Praful S. If you are committed, you will find the time to look at property and learn your market. Weekends, on the way home from work, etc. I realized that I had a real estate problem when I went to get milk from the store and my wife called me an hour later wondering where I was. I was looking at property that I saw online. If your friends don't tell you that you should slow down, you are not going hard enough. It's worth it.

@Praful S. You need to define your criteria so you can tell others what you want. Will make it easier to pull the trigger when you see it as well.

Don't just pick a market randomly. Select a market that you know or have boots on the ground you trust. If you don't have a market in mind, check out IRR or Marcus and Millichap's Multifamily Reports and identify a market that you're comfortable with. From there, use Loopnet to identify brokers and begin reaching out to them. Tell them your criteria and plan a visit to the area to meet them and have them educate you on the market.

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