Multifamily Learning Advice (newbie)

17 Replies

I'm starting law school in the fall after working for a real estate lead gen company for two years. I've read the typical starter books on REI in general, as well as some ones on multifamily and am most excited by multifamily/commercial. I don't have any experience in this arena besides a short community outreach internship for a commercial investment company and am eager to learn more and get more involved. I have the strong urge to jump into investing after listening to all the stories on BPP and reading these books, but currently would only have about $20K savings to spend.

I am in Southern California, so I think I would have to look at an out of state market to get my feet wet. Instead of putting it into an out of state smaller property, I was thinking about attending some REI meetups around LA and starting a mass mailing campaign.

My short term goals: Develop skills in this specific type of lead development/management and find at least one good deal before graduation (law school is 3 years). My thinking would be to either assign the contract or take it to someone with experience and basically gift it to them in exchange for just allowing me to see under the hood of the deal and follow the process up close. 

Longer goal: Use the system already in place to take advantage of deals with my own money after a few years of working and saving. 

Even longer term goal: Syndication

Issues: Time dedication during 1st year-- career path and long term earnings are largely based on first year performance. I am told it's ill advised to do anything outside of school during this year. 

Is this the best way to work towards my goals? Am I missing anything crucial or am I misguided?  Any insight is appreciated-- thank you for your time in advance. 

Originally posted by @Danny Randazzo :

@Ian Kirk what is driving you to go to law school? You sound very excited and passionate about real estate investing. 

 Firstly, thank you for taking the time to respond. 

My draw to law school has been largely guided by the ROI and post grad career track. I basically have seen it as a pursuit that will get me the income needed to invest in real estate, experience with high level deals (if I do get a RE Law gig), a valuable niche within great network, and a career to anchor me. It was a path I set out on a while ago when I was naive to the many avenues and opportunities out there-- I can see now that pursuing law to get into investing probably wasn't the best way to go. But as of this moment it seems like the option with the best risk profile for me.

Hey @Ian Kirk I would recommend checking out a MF conference.  I have been to a couple of Rod Khleif events and would highly recommend.  You will learn a ton about starting in MF, and have the opportunity to meet/network with hundreds of people investing in RE already.  It is definitely worth the couple hundred dollars for the value added.  He has one coming up in MD in September.  If investing in MF is your goal, I would have a hard time seeing a way you wouldn't be glad you went...

That works also.  I would recommend his podcast as well.  In the meantime I know there are several RE meetups in and around the LA area.  It won't let me tag them but David Gwilt and Powell Chee could certainly point you in the right direction.  I know David is on here and think Powell is as well.  Reach out and tell David I sent you his way. Good luck and hope to see you at an event in the future.

@Ian Kirk

I'm an attorney and there are a lot of attorneys on this site. I wont try to talk you out of the law but I would encourage you to think good and hard about any student loans you may be considering and the implications that may have on your ability to allocate funds towards your investments in the near future.

Generally, as you seem to understand, your 1L year is very demanding and will require much of your effort and attention. I would suggest in the first year minimizing your RE involvement to podcasts and occasional meetups with a focus on meeting RE attorneys that you can get plugged in with. Grades matter, who you know matters just as much or more. This will also help drive or better shape what type of law you practice (or if you even do). The better money is generally on the private sector transactional/business side so keep that in mind if money is your motivator. Look into joining or starting any clubs or journals related to real estate or where you could write about REI to get your name out there and build your resume.

Your 2L and 3L year would be a better time to invest though I would personally just recommend waiting until after the bar to start buying.

Lot more to say on this but I need to bill some hours....

Regards,

Thanks @Danny Randazzo - I will. 

@Andy Brown - Thank you for this response. Debt is the definitely the more painful part of the move. I've been borderline neurotic in looking at post debt/living cost earnings post grad and like to think I've given the debt an honest look. It's certainly a hit, but I am aiming for that private sector (big law or bust-ish mentality). We're in a tight, but still market paying location here in LA so it just looks like that's one of my best bets for making a good amount- even after debt payments. 

Your response is really apt-- once again, much appreciated. Since you might be in the know about student loan repayment, just curious, would you advise allocating money to cash flowing investments over direct debt payments in the earlier years of working? For instance, if you one netted $100K cash after a year or two working and had $100K debt @ 6%, would you put that earned $100K into an investment that had (hopefully) greater than or equal to 6% CoC returns and funnel those returns into your debt payments? Or would you just clear your debt immediately?

This is an idea that's been stuck in the background of my head for a bit. It seems like investing it could potentially offset your loan payments and leave you with at least the total owed amount at the end. I would love to know if my thinking on this is off. 

I wish I was thinking of RE at your early age.  You combine that with a law degree and that would be an amazing combination.  I'm not a lawyer, but seems Andy Brown has good advice to concentrate on school and grades at first.  You have 30 to 40 years to grow your RE empire.  I second the Rod Khleif organization too.  It seems to be a great network of real estate investors!

@John Phillips Thank you. I appreciate the input-- having to do some up front time and energy investment into the grades looks like it may be the call. I also appreciate the perspective and faith. It's difficult to think about the bigger picture with no deals under the belt, but 30-40 years is a pretty big amount. 

@Ian Kirk

I would suggest finding someone you can assist to get a cut in the deals you help with. 2 suggestions:

1. Start following up with anyone that responds to you on BiggerPockets

2. Start going to real estate networking events near by to meet people doing what you want to do and offer your assistance.

Happy to help!

@Josh Oaten Thank you. That sounds like a good way to go about it given my situation. I'll make a goal to connect with the people I want to do. 

Just curious, what way could someone in my position-- either now or in a year or so, actually provide value to a person in your position? 

@Ian Kirk

Tough call on the debt pay-down. I think there are probably dozens of threads on the forums on that very topic that could speak on the issue better than I can. Dave Ramsey would say to knock the debt out first-- but he tends to come more from a personal finance perspective of debt. I really, really, hate personal debt so I think I would be tempted just to pay off my loan if I were presented with the scenario you proposed. However, all things being equal, I suspect the smarter approach is to do a bit of both. It's amazing how you can listen to hundreds of hours of podcasts and books and it still falls drastically short of what you'll learn simply by buying your first property. So I would try to get into buying a home as soon as practical after the bar. But keep in mind, if you hate practicing law, which many, many lawyers do, you may be forced to keep practicing solely because of your personal debt-- which is why many miserable attorneys keep practicing. So there's that. Hopefully you find work you enjoy.

Something else to think about, especially if you're single, is to drastically watch your personal spending. That is where the battle is really won. I drove a 1990 Ford Tempo before and all through law school (2012-2015), split $650 rent with three other guys, ate frozen dinners, and was able to avoid taking out any student loans. When you do become an attorney, be very, very, cautious of the lifestyle creep that attorneys so often get sucked into. For a paradigm shifting read on this issue and personal finance generally I would HIGHLY suggest reading the Millionaire Next Door. 

Feel free to PM me for more info. 

Regards,