Looking for help purchasing my 1st multi family building! HELP!

78 Replies

Hello everyone! I’m looking to venture into real-estate. I currently have no experience at all. I live in NJ and I want to dive right into multi family buildings. Any pointers on how to get started? Should I start small?  Any information from anyone would help. Thanks so much guys! 

I am in the same position as you and my plan is to start small by wholesaling and flipping single family and multifamily (4 units or less) properties until I can build a nice down payment to put down on a multifamily property (38+ units). Hardest part is the beginning, but you have to be like the grass, that no matter what they do to you, it keeps coming back :-)

@Quinyana Mosley you don't have to start small. When I started looking into multifamily, I went right for the big stuff because it had the type of management structure I wanted (on-site personnel). 

You're going to need to spend a few months learning first, though. Listen to every BP Podcast on Multifamily. Read the books they mention at the end. This will give you the foundation you need to start having conversations with people in the industry. Then I'd start going to seminars, conferences, and workshops on multifamily investing. There are plenty of them all over the country. 

Originally posted by @Quinyana Mosley :
@Sam Grooms Thank you so much sir!

You're welcome! It's basically the path I took. There was about a year between first looking into multifamily and closing on my first property. It might seem like a long time, but I'm not sure how I could have done it much faster. Maybe if I took @Ben Leybovich 's consulting. 

Check out Jake and Gino “Wheelbarrow profits” podcast. There’s a great variety of guests on their show mostly revolving around multifamily. It’s always good content.  They also provide education! 

1. Buy buildings with your own cash  and financing

2. Buy buildings with partners that together have the money and track record. 

3. Syndicate – this in my mind should be done by sponsors that have experience with small multi-family at a minimum. A syndication is basically gathering a bunch of people together to passively invest in your/your partners deal. 

4. Raise money for a Syndication – This is a great beginner’s way for someone that has a network and wants to get involved in the deal. This allows you to invest in the deal and build your investor network as well as likely take part in the General Partnership. 

5. Invest your own money in a syndication. Be sure you find ways to be involved.

6. Be a bird dog and find the deals for other apartment buyers. You can get paid $50k or possibly more for finding the right deal for a buyer. 

7. Volunteer or get paid to work with an investor. Be sure you can add true value by asking people you know to help them. I would try to get to know investors before just saying you will volunteer for them. 

8. Start small. This is what I did. When I started I was buying 1-4 unit buildings for rentals and I was completing flips. Really buying any real estate that will make you money will be good experience, but buying real estate that is closest to you final goal is the best. 

9. Become a property manager, real estate agent (commercial), appraiser, inspector, mortgage broker, etc. 

10. Learn - Books, podcasts, conferences, BP, coaching, etc

See the article that I wrote on this: 

https://www.biggerpockets.com/blogs/10145/70092-ge...

Read articles on this site, listen to podcasts (as already suggested), and find a networking group in your area so you can meet people who have already done what you want to do.

@Sam Grooms A year isn’t bad at all. I’m currently looking into some seminars I can attend in my area now, I believe once I get into one and listen to some podcasts I’ll be ok, right now I feel like I’m stuck I don’t know where to start.

@Quinyana Mosley you are starting in the right direction - you are here on BP asking questions and learning.

Please know the road ahead can be challenging. What has helped me along my journey, was to know with certainty and focus "My WHY".

I cover more on that on this thread and hope you get a couple nuggets of info to help you.

I quit my CPA Job to buy Large Apartment Buildings

Good luck!!

@Quinyana Mosley Start small. I spent a lot of money with seminars and it's really not the best advice. If you have money saved up, start by going to your local REIA's. Hold on to the money you have to work on your first deal. All the stuff the seminars teach can be learned through your REIA, making connections with other investors, and even partnering on a deal. Offer to intern with a real estate investor and you will learn a lot. I ALWAYS come here for help if I'm stuck with an issue. The is the best community for real estate investing. I wish you nothing but the best.

When someone want to p;ay guitar then that becomes their passion and they pursue it until they are on stage performing or recording. When someone wants to become a dentist that is what they focus on and learn what it takes. Get involved with those already in the busines to learn what they have to say. 

You will not always need money but doing real estate without first earning some seed money will be very difficult although a lot of people actually do it. 

It you start small you can take time to learn things step by step that way if you make mistakes it will not cost you all that much. Make cup cakes to sell and learn that way if your recipee or technique is not correct you will not lose a lot of dow but if you try to make a 10 foot diameter pizza from the get go and it turns out not well then you lose a lot of dow. 

My first time out I blew it and lost about $120K. I have earned the $120K by finding building lots in a neighborhood of million dollar houses. I had a lot of building experience at the time so I got an investor to put up a down payment to get the lots and the investor was also to put up the money to buy all of the building materials but that never materialized. 

I was stuck with a propery we had borrowed to purchase but has put a down payment on. I investor copped out so I chose to keep on making the payments on my own for about 3 years. We it turned out my feeling about the appreciation we could realize on the property were correct and after 3 years we had a $120K equity built up on the property. I decided to sell it and used the $120K to buy a bunch of junk, property nobody wanted, all fixer uppers. I though I would have the same luck finding interested investors, didn't happen. I did not have enough to fix the properties up on my own. In retrospect I could have used all of the money, bought one fixer upper went ahead and fixed and either rent it out or sell it for a gain. I over stretched myself. Wel it did not take long before those properties began to drain all of my money at the time until I lost them all to foreclosure. I did not know a city could take your property if you did not fix it up within a certain period of time, then of course there were property taxes to keep paying. I didn't even know about that. 

On the first two lots which I sold the escrow agent and title company paid whatever taxes I owed but I was not aware of it. I only knew I made a profit of $120K and ran with that. 

It all turned out to be an expensive lesson for me but I learned from it. There was no BiggerPockets online at the time and in fact we did not even have home computers or the internet then. 

Thank God I never made that mistake ever again.

@Quinyana Mosley you may want to end up in multi family but remember there are many ways to reach that goal. Down pmt on a large multi family thats also a good deal tends to be the biggest hurdle for most. So how do you get there? I’d agree w almost everything everyone has said in this thread but I’d add personal financial discipline to the long list as well as the importance of not spending or dipping into your capital aka savings for odds and ends on the Journey. Never do it. Instead plow each success into the next. A great starter book full of ideas is “How to wake up the financial genius inside you” by Mark Haroldsen. Lastly but most Importantly In my opinion Is to pray for opportunIty :) Best of Luck and God Bless. -Bradley
Originally posted by @Gilbert Dominguez :

When someone want to p;ay guitar then that becomes their passion and they pursue it until they are on stage performing or recording. When someone wants to become a dentist that is what they focus on and learn what it takes. Get involved with those already in the busines to learn what they have to say. 

You will not always need money but doing real estate without first earning some seed money will be very difficult although a lot of people actually do it. 

It you start small you can take time to learn things step by step that way if you make mistakes it will not cost you all that much. Make cup cakes to sell and learn that way if your recipee or technique is not correct you will not lose a lot of dow but if you try to make a 10 foot diameter pizza from the get go and it turns out not well then you lose a lot of dow. 

My first time out I blew it and lost about $120K. I have earned the $120K by finding building lots in a neighborhood of million dollar houses. I had a lot of building experience at the time so I got an investor to put up a down payment to get the lots and the investor was also to put up the money to buy all of the building materials but that never materialized. 

I was stuck with a propery we had borrowed to purchase but has put a down payment on. I investor copped out so I chose to keep on making the payments on my own for about 3 years. We it turned out my feeling about the appreciation we could realize on the property were correct and after 3 years we had a $120K equity built up on the property. I decided to sell it and used the $120K to buy a bunch of junk, property nobody wanted, all fixer uppers. I though I would have the same luck finding interested investors, didn't happen. I did not have enough to fix the properties up on my own. In retrospect I could have used all of the money, bought one fixer upper went ahead and fixed and either rent it out or sell it for a gain. I over stretched myself. Wel it did not take long before those properties began to drain all of my money at the time until I lost them all to foreclosure. I did not know a city could take your property if you did not fix it up within a certain period of time, then of course there were property taxes to keep paying. I didn't even know about that. 

On the first two lots which I sold the escrow agent and title company paid whatever taxes I owed but I was not aware of it. I only knew I made a profit of $120K and ran with that. 

It all turned out to be an expensive lesson for me but I learned from it. There was no BiggerPockets online at the time and in fact we did not even have home computers or the internet then. 

Thank God I never made that mistake ever again.

Great story, Gilbert. 

I think the overall lesson here is you need an education. Most people like to get that education by starting out small to learn the ropes. However, that's not the only way to get an education. You can also educate yourself through books, podcasts, seminars, etc. You can also partner with someone who has done it before. It just depends what type of learner you are.