Rental Property Investor · Edmond, OK · Member since 2018 · 5 posts · 1 vote
I am new to real estate investing and I am interested in purchasing multi-family properties for passive income. Is investing in multifamily properties a good place to start for a newbie like myself?
There are a lot of ways to invest in real estate. Multi-family is one. The "best" way to get started is to learn your market and what a good deal looks like there. Then, surround yourself with others who are experienced in what you are trying to do. This will increase your thinking of what is realistic. After 10 years of hard work and dedication, you will be an overnight success.
@Kingsley Edemidiong from what I understand, a duplex to nothing more than a 4 Plex should be manageable. That's what we're looking for. You could live in 1 and rent out the other/s and maybe not have to pay anything for your unit. Also you should be able to get a conventional loan for most multi family properties 4 units and under. Good Luck!
Yes multifamily is a great way to start but you need to get educated on the business. It also requires capital so you either need to have cash or know people with cash or learn how to raise cash. The best way to fast track your success and do bigger deals is to find a mentor, partner with an experienced operator or invest passively.
Multi family house hacking is the best way to start in my opinion. It is one of the safest financially and you can make sure everyone is keeping there unit well kept up since you would be living there with them.
There are a lot of ways to invest in real estate. Multi-family is one. The "best" way to get started is to learn your market and what a good deal looks like there. Then, surround yourself with others who are experienced in what you are trying to do. This will increase your thinking of what is realistic. After 10 years of hard work and dedication, you will be an overnight success.
I think MF is the way to go as well. But it may not be the best place to start for everyone. Here is a webinar you may be interested in if you want to learn more about why MF is preferred over other strategies. https://mailchi.mp/f5e8d268224b/7-reasons
But the main thing is to get started and get in motion. You can't steer a parked car. Get that thing moving!
To answer your question - yes. There’s always turnkey operators... but my biggest piece of advice is to become insanely data driven. Every subject property has a purchase price that makes it a great deal, set your parameters, dont be afraid to make offers based on the data, and don’t get emotional or do a sub par deal because you want to “get it going”.
I got started with house hacking a 4 plex and currently in the process of purchasing my second house hack. I want to continue to grow from here but house hacking was a great way to balance having my own place with starting my investment career.
Not sure if that's you're able to do that but it's a great place to start!
@Kingsley Edemidiong - you can invest with an experienced investor and learn about MF investing this way. It could be a truly passive investment if you invest with a syndicator (you don't look for the property, sign on the loan or manage it), or you can take an active part of it if you partner up.
@Kingsley Edemidiong MF is a great way to start I agree with @Anthony Dooley know your market and if money is tight doing a hack it is a great way to start. Happy Investing!!
@Kingsley Edemidiong Having been in the business for 20 years as a developer, my experience has taught me that there is no set category. You may find a good deal in single family just as you may find it in multi family. It all depends on your budget and what geographical area you are comfortable with. And just as I have seen many people commenting on this forum, you may want give syndication a try if you want to take a less of a hands on approach.
@Kingsley Edemidiong think about what you want out of the investment. Is it cheap rent? (house-hack) is it long term wealth? Is it being a landlord?
You need to figure out your "why" and work backwards and see what you can handle and what you can't. I ignored this for a long time and I regret wasting so much time.
@Kingsley Edemidiong there are number of ways to benefit from multifamily. You can start out small such as a duplex or a quad. You can go Bigger if you raise private money by syndication. Also, if you have your own money then one way is to invest in someone else's deal passively to learn.
I am also looking to start investing in multifamily properties, but house-hacking is not an option since I already in a single family home my wife and I purchased last year. What’s your recommendation as far required capital to start investing on MF and type of MF property? Any suggestion on options for hard-money lending?
@Kingsley Edemidiong are you interested in small multi-family (under 5 units) or are you looking at small/large apartments? Either way, the first thing I would do is educate yourself as much as possible.
it will then help to identify a niche and start analzying properties, you can never get enough practice.
Read every book and listen to every podcast. I would also attend your local REI meet up and network with people who are already doing what you want to do. In this game, networking and relationship building is absolutely key!
@Kingsley Edemidiong I would recommend the best place to start is education. If you think multifamily is an investment you'd like to make then read some books, podcasts, go to a conference, etc. Gain a substantial amount of knowledge before putting your hard earned money at risk. As other have mentioned you can also create passive income in multifamily vie syndication. It's a fantastic approach to creating passive income and not having to do any of the asset management duties. What you will have to do is still get an education and be able to understand which sponsors are reputable and who you should pass on. One of the best ways to understand which sponsors are good and not is by learning to underwrite deals yourself. You will learn what conservative underwriting should look like vs who throws the word around casually. Get on some sponsors (syndicators) lists, listen to their webinars and vet them heavily if you choose to take this route.
@Kingsley Edemidiong Welcome! We started with the duplex, which we house hacked. Especially if you are how is hacking it, small multi family is definitely possible for your first deal. You could even consider going with something bigger, although for most people starting out I would not recommend that
@Kingsley Edemidiong depending on your situation, the ability to buy a multi unit (live in one unit) and rent the others, and be able to qualify for an FHA loan (3.5% down only) is something to think about..
Absolutely! I am a newby myself and actively looking for my first investment property. I’m mainly interested in 3 to 5 unit properties where I’d owner occupy.
Definitely focus on educating yourself and networking. Go to several local real estate meetups in your area, be outspoken, and ask a ton of questions. That has been a big help to me so far.
I recommend starting with a duplex, triplex or fourplex max and house hacking it as an owner/investor. That's how I started. It also opens up the possibility of an FHA and even (if needed) renovation funding through the 203k renovation loan structure. I've used both FHA and FHA 203k in my duplex in LA and now triplex in Oakland. It takes due diligence and patience but I think it's worth it!