What Is Your ONE Question About Apartment Investing?

103 Replies

If you're a newbie or beginner investor, I want to help you. 

What is the ONE question about apartment investing that you like to get answered? 

I have been buying houses and apartments since 1999 and have about 1,000 apartment units in my portfolio. So I think I can say that I know apartment investing ;)

I will answer the top 10 questions in the form of videos and blog posts.

To help me identify the top 10 questions to answer, please do 1 of 2 (or both) things below:

A. Which among the questions below is the one main question you need answered?
and

B. What other questions do you have that you want answered?

Here are the questions that appear most often on BP (just based on my observation - I did not do an actual count nor did a statistical analysis, and they're not arranged in any order):

1. I have no money and bad credit but I want to invest - how?

2. I have $100,000 - what's the best way to start?

3. The recession is coming. Should I buy now or wait?

4. I can't seem to find good deals. Help!

5. I want to start syndicating apartment deals, but how? (or How can I raise capital for my deals?)

6. Can I really buy apartments with $0 down?

7. Will you buy a property with negative cashflow?

8. Is it possible to invest passively in real estate?

9. Should I get a mentor? (or What can you say about apartment investing program of [guru]?)

10. Wife does not like me to invest in real estate. What do I do?

Kind of a variation on #1 & #5. I have excellent credit and 15 years experience with SFH, duplex & quadplex units, but the best way to find private money partners would be helpful.

A little context: the size of the first deal I want to take down is around $2 million for about 40-50 units.

I would like to see a video on your due diligence process. There is a longer checklist with MFH and that is something I am still wrapping my head around. These videos would be super helpful coming from someone with your track record.

Originally posted by @Erik Whiting :

Kind of a variation on #1 & #5. I have excellent credit and 15 years experience with SFH, duplex & quadplex units, but the best way to find private money partners would be helpful.

A little context: the size of the first deal I want to take down is around $2 million for about 40-50 units.

 Thanks Eric. That's a good variation to question #5. 

Thanks for offering to share your wisdom @Michael Ealy . My question is more about neighborhoods. The deals that I can realistically pursue today are mostly in C to D neighborhoods. What is your position on areas/quality of neighborhoods to invest in? Thanks in advance! 

Originally posted by @Frank Geiger :

I would like to see a video on your due diligence process. There is a longer checklist with MFH and that is something I am still wrapping my head around. These videos would be super helpful coming from someone with your track record.

 Thanks Frank. That's a good topic to talk about since there's more due diligence with MFH vs. single family homes, specially when it comes to verifying the financials.

Originally posted by @Shardae Robinson :

Thanks for offering to share your wisdom @Michael Ealy. My question is more about neighborhoods. The deals that I can realistically pursue today are mostly in C to D neighborhoods. What is your position on areas/quality of neighborhoods to invest in? Thanks in advance! 

 Shardae,

Good question as well. I started with F (war zones) and actually made a lot of money with it (although I don't recommend it). And C & D are good but you need several things to increase the chances of succeeding in those areas.

My question is why is Apartment Investing the SEXY one out of the Multifamily Housing category!


What about Mobile Homes, Student Housing or Senior Living! 😆😆😆

Originally posted by @Erik Whiting :

Kind of a variation on #1 & #5. I have excellent credit and 15 years experience with SFH, duplex & quadplex units, but the best way to find private money partners would be helpful.

A little context: the size of the first deal I want to take down is around $2 million for about 40-50 units.

Step 1: Create a lead magnate and put it on your website. This is a special report that you created, when someone clicks on the special report, they get a valuable piece of content and become your lead.

Step 2: Use your experience to get on to podcasts. Tell your story and your new business plan. 

Step 3: Provide a ton of value on biggerpockets. Answer forum questions, ask thought provoking questions, write blogs, etc

Step 4: Do the same on Facebook, LinkedIn, Twitter, etc. Provide value

Step 5: Speak about what you have done at meet ups and conferences. 

Always use you lead magnate as a source for future leads. 

 

Originally posted by @Shardae Robinson :

Thanks for offering to share your wisdom @Michael Ealy . My question is more about neighborhoods. The deals that I can realistically pursue today are mostly in C to D neighborhoods. What is your position on areas/quality of neighborhoods to invest in? Thanks in advance! 

What is stopping you from investing in B class areas? I would suggest looking at B class. A lot less risk and higher appreciation. 

 

Originally posted by @Todd Dexheimer :
Originally posted by @Erik Whiting:

Kind of a variation on #1 & #5. I have excellent credit and 15 years experience with SFH, duplex & quadplex units, but the best way to find private money partners would be helpful.

A little context: the size of the first deal I want to take down is around $2 million for about 40-50 units.

Step 1: Create a lead magnate and put it on your website. This is a special report that you created, when someone clicks on the special report, they get a valuable piece of content and become your lead.

Step 2: Use your experience to get on to podcasts. Tell your story and your new business plan. 

Step 3: Provide a ton of value on biggerpockets. Answer forum questions, ask thought provoking questions, write blogs, etc

Step 4: Do the same on Facebook, LinkedIn, Twitter, etc. Provide value

Step 5: Speak about what you have done at meet ups and conferences. 

Always use you lead magnate as a source for future leads. 

 

 Thanks Todd.

My answer is similar but you can do this offline as well Erik. The principle that Todd mentioned here is to attract investors, you need to be perceived as an expert - others even coined the term "expert marketing". I will elaborate more when I produce the video/write the blog post.

1000 units is impressive! Write a book so I can read it. :-)

I really like this question: 4. I can't seem to find good deals. Help!

I'm not so much interested in the general answer (typically people talk about postcards, driving for dollars, etc.), rather, I'm really interested in learning how you use your network to find deals. 

Whether it's brokers, owners, wholesalers, etc. how did you end up finding a few of your multi-family deals. I think hearing the specifics and the process would be really beneficial to the audience, as well as if you have a preference between working with brokers, wholesalers, owners, selling agents, etc. 

How do you build your rehab team? Meaning if you are looking to buy a value add property how do you KNOW that the rehab will go smooth and properly. My fear is the costs go higher, takes longer, cheaper materials, shortcuts to cut costs or the builder leaves midway (which in my opinion is worse than never beginning).

Thank you and very kind of you offering your time. We all appreciate it.

@Michael Ealy Thanks for this thread and your time to answer questions for us! 

A. #1 - but I have excellent credit...BRRRRing multifamily properties is my goal moving forward (have 2 SFH)

B. How did you build your team starting off? And what confirmations did you receive that led you to trust who you chose for your team? 

Originally posted by @Karl B. :

1000 units is impressive! Write a book so I can read it. :-)

I really like this question: 4. I can't seem to find good deals. Help!

I'm not so much interested in the general answer (typically people talk about postcards, driving for dollars, etc.), rather, I'm really interested in learning how you use your network to find deals. 

Whether it's brokers, owners, wholesalers, etc. how did you end up finding a few of your multi-family deals. I think hearing the specifics and the process would be really beneficial to the audience, as well as if you have a preference between working with brokers, wholesalers, owners, selling agents, etc. 

 1,000 units seem to be a lot but it's not a big deal. I've been doing it since 1999. I've acquired over 1,800 apartment units and sold 800.

I've actually acquired 346 units this year (and will have another 121 units to be closed by January/February of 2020). I've found a good partner which is a better apartment operator than me so I will likely buy another 1,000 apartment units in total next year. 

Writing a book about it - the book is in editing phase right now ;)

And yes, I will share the exact ways I find deals.

Originally posted by @Michael Ealy :
Originally posted by @Karl B.:

1000 units is impressive! Write a book so I can read it. :-)

I really like this question: 4. I can't seem to find good deals. Help!

I'm not so much interested in the general answer (typically people talk about postcards, driving for dollars, etc.), rather, I'm really interested in learning how you use your network to find deals. 

Whether it's brokers, owners, wholesalers, etc. how did you end up finding a few of your multi-family deals. I think hearing the specifics and the process would be really beneficial to the audience, as well as if you have a preference between working with brokers, wholesalers, owners, selling agents, etc. 

 1,000 units seem to be a lot but it's not a big deal. I've been doing it since 1999. I've acquired over 1,800 apartment units and sold 800.

I've actually acquired 346 units this year (and will have another 121 units to be closed by January/February of 2020). I've found a good partner which is a better apartment operator than me so I will likely buy another 1,000 apartment units in total next year. 

Writing a book about it - the book is in editing phase right now ;)

And yes, I will share the exact ways I find deals.

Very impressive! Will it be a BP book? I look forward to reading it once it's published. 

 

@Michael Ealy thank you for taking time to field questions, this has been a very informative post.

Not on your list and I don't want to steal a chapter from your book, but I'm curious about your planning for repositioning a property.  I've seen you reference taking some places that had immense upside, but that it takes a lot of skill.  With the market that we are in at the moment, those properties would certainly open up other opportunities. 

Thanks for your time

Is there anything different to consider for a small complex (8-12 units on 2 acres, paved road access) in a rural area on the edge of town versus one in that is more centrally located?  The one thing I thought of was that it has a well and septic, but was wondering if there were other gotchas with this type of situation.

@Michael Ealy

What type of things to succeed? I am looking to buy a c-d and it may be too good to be true. Cost monthly appears 7500 finance costs but with 22 units which should rent for 700$ each, that is 15,400 cash flow. Double Cost.

What am I Missing?

Hans

@Hans Agarwal

Back of the napkin numbers... 50% of your revenue received will end up in expenses... so half of $15k is $7.5k... after your debt service, you may be cash flowing negatively. C-D properties generally have higher expenses, especially the older buildings.

Hello,

I would like these to be top questions on my mind, I have been investing in real estate for more than a decade but sadly not in USA (in my home country, I have close to 30 homes, half of them inherited), I own a home in USA and have been thinking about investing in apartment communities but need a place to start..

Top Questions:
5. I want to start syndicating apartment deals, but how? (or How can I raise capital for my deals?)
9. Should I get a mentor? (or What can you say about apartment investing program of [guru]?)
3. The recession is coming. Should I buy now or wait?
Thanks,


3. The recession is coming. Should I buy now or wait?

@Michael Ealy great project! I wrestled with these along the way.

How do I know If I can manage a MF building, say 10-20 units.

How do I know I can make a profit with a long term hold on this property.

Why Syndicating is a completely different business from being a LL. Don't confuse the two.

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