I’m looking for advice on finding my first multifamily deal.
A partner and I have about 300k to work with, 200 from investors, and we want to either (1) find a deal with decent cashflow and buy and hold to gain experience for the next deal or (2) buy from a mom and pop operator and do some small value add to gain experience for the next deal.
The issue is finding a deal, I’ve heard Loopnet has low quality deals and brokers won’t take you seriously until you have a track record.
Our main goal is to gain experience and a track record to move up to larger deals, do you have any thoughts on how to break in and find a first deal?
You need to partner up with a seasoned investor. When it comes to handling your money let alone someone else's, you need to mitigate your risk as much as possible. With a lack of experience in multi-family investing, you are definitely going to make mistakes on your own that could have been avoided if you simply joined someone who already had systems in place. I hope this helped.
@Shafi Noss RE investing is risky. I would not take anybody's money till I knew what I was doing and even then personally I would not. Just my thoughts on the matter. Use your own money and partner if you need to, and not with people who have no experience. That way it is just you and your money involved, and you are learning and gaining valuable experience as you go.
@Shafi Noss have you tried direct mail? Cold calling? Purchase a list of of multifamily properties that fit your criteria. Mail these owners and stay consistent doing so. Build rapport them to where they feel confident enough to do business with you. You can also use loopnet to network with brokers who control the most inventory in their area. Reach out to those brokers that stand out with the most listings. Reach out to them. Let them know who you are and what you're looking to accomplish. Talking the right lingo will give you instant credibility with the broker. If you're not talking the right lingo, chances are you will shoot yourself in the foot
@Shafi Noss Congratulations on taking the leap into real estate investing!
I've responded to a couple of other threads very similar to yours and I'm trying to avoid copy/paste. But, my hope is that the information helps you and others out who are in a similar position.
So, quick question. If your goal is cash flow and experience, have you thought about higher-quality SFH?
I know there are amazing deals to be found in the multi-family space, however, something I ask investors weighing the pros/cons of single-family and multi-family is this - When is the last time you drove by a tri-plex or quad-plex and just thought, "Wow, what an amazing house! I would love to live there!"? The response I usually get is a chuckle. Because they know those properties aren't always the nicest, they often aren't in the best neighborhoods, and they ultimately wouldn't want to live there either.
What can make or break your investment is the quality of tenant(s) you attract and put in the property. Again, I know there are great multi-family deals out there and tons of success stories, so I'm not saying they can't be found or that they aren't successful.
However, if you could achieve the same results with one or more higher-quality single-family homes that cost just the same with less risk, are in nicer areas, and attract a better quality tenant that pays on time, doesn't trash the house, and is pleasant to work with - which would you choose?
Just a thought!
Let me know if you have any questions! I'd be happy to help in any way I can!