Hey Biggerpockets family!
Mainly just looking for advice here. I'm 23 and recently just finished up school. I've been studying real estate now for about a year and a half, and have really become interested in commercial real estate (large multifamily). But Lately I've been feeling stuck as if I'm in a consistent loop where all I'm doing is studying rather than taking action. I know it mainly has to do with resistance and fear of failure, but also feeling a little lost on what the first step should be. Any advice on how to push through that threshold?
@Evan Dyer If you're looking to go the syndication route, then you'll want to do the things that are recommended below.
Recommendations When Starting Out
1. Pick a target area. You want to focus on one area so that you're familiar with the area and so that you have meaningful relationships with brokers, property managers, and other professionals that will ultimately lead to you getting better deals and better information.
2. Find sponsors. Sponsors are people that have the financial and experience track records to qualify for the loans that you'll need to acquire properties (unless you're not planning to use any debt). If you develop good relationships with them, then they might even let you use their track records to get good deals that you wouldn't get otherwise and to attract investors that would be more skeptical about investing with somebody that has no prior track record.
3. Find investors. Many syndicators make the mistake of spending too much time finding deals and not enough time finding investors. You should be spending as much time finding investors as you are finding deals. It's often said that you'll be able to find the money if you find a good deal. While there is truth to that in certain regards, it's tough to do that in syndication because there are strict rules and regulations that must be followed when raising capital.
4. Find partners. Most successful syndication groups have at least two (2) partners. It gives investors more confidence knowing that multiple people are involved because having only a single person in charge can be risky in case anything happens to that person. It also helps to divide the workload. When you first start out, there won't be much to do. But as you start building momentum, you'll quickly have more to do than you'll be able to handle, especially if you're working a full-time job and have other life obligations. My recommendation is to have one (1) person handle the acquisitions and one (1) person handle the investor relations. If you have more than two (2) people involved, then you can always further divide the workload accordingly.
Do a google search and find LL orgs in your area sign up and start networking-meetings starting up again soon we hope. Do some searches on here too. Conversations going on right now. "How did you land your first apartment deal". All the best!
I would start with education! I read Joe Fairless' Best Ever Apartment Syndication book, ABCs of Real Estate by Ken McElroy, Rich Dad Poor Dad by Robert Kiyosaki, Think and Grow Rich by Napoleon Hill, etc. The key is to never stop! There are so many good books on commercial real estate, and mindset. Make sure to read both kinds.
Listen to podcasts as well. Here are a few of my favorites:
Lifetime Cash Flow Through Real Estate Investing with Rod Khleif
Apartment Building Investing with Michael Blank
Wheelbarrow Profits by Jake and Gino
Also, look into finding a mentor or a coach. In order to do this, try creating a BP post on reviews from other investors who have worked with a mentor in the past. Most of these will be paid. A few good ones I know of are:
-Jake and Gino
These will cost some money, so if you can't invest that much yet, consider finding other syndicators in your markets of interest and find a way to bring them value. This typically is in the form of raising capital you can invest in a deal (which might not be an option if you don't have money at the moment). Another option is to find a deal. You can do this by learning how to underwrite, and networking with brokers. This is going to take some time, because relationships aren't established overnight.
PM me if you have any other questions. Good luck!
Thank you for the advice! I’ll definitely start doing that.
How do you go about starting these relationships with sponsors? Just by coldcalling them?
Appreciate the advice! I’ll be in touch.
@Evan Dyer Cold calling them is definitely one way. If you have any mutual connections, then having them make an introduction is even better.
@Jeffrey Donis I highly recommend Jake and Gino. I joined them 4 years ago and never looked back.
Please feel free to pm me if you want to hear more about my experience.
A lot of first-time investors would often get stuck with the "analysis paralysis" phase in fear of failure. Of course, you should try to learn all the things that you need by reading books, listening to podcasts, and picking the brains of mentors but I'd say the best learning experience would be to take the plunge and go dive right in. You can try to mock up a deal as if you were going to present it to an investor. You don’t know what you don’t know until you actually do it. Having something tangible or developed is the key. You can also start as an LP investor while learning the ropes. Best of luck on your RE investing journey!
Networking is crucial whether that is LinkedIn or in person in your community. Reading and listening to podcasts as well. Some good ones are Wheelbarrow Profits by Jake and Gino as well as Apartment building investing by Michael Blank.
@Evan Dyer First of all - congrats on thinking BIG and studying commercial real estate. I'm sure you're not alone in feeling stuck...there are a lot of moving parts and it's hard to know where to start. Shoot me a message - I have some resources that helped me and I'm happy to share and give you some direction.
Thank you for all the replies guys. The advice truly means a lot as i start my investing journey.
I totally agree with @Charles Seaman . Also, set weekly goals for leading indicator actions like: # of emails sent to sponsors, # of zoom calls booked with sponsors, # of deals evaluated, # of property tours, etc. These actions build up over time to create massive value. If you have not read Atomic Habits, it's a good book to add to your library. It essentially explains how to setup your life to make habits like these easy.
@Jeffrey Donis Great advice. Can't really top this haha
There are many different avenues to take to be successful in real estate, BUT ONLY for the committed. If you are not willing to put in your 110% and do things others are not willing to do, I would not waste your time.
There are tons of free resources out there, paid mentorships, and of course you can always find a way to add value to another experienced operator to get your foot in the door.
Don't overthink it and don't over plan it. Take a step, and then another step, and then another step. Tell your friends and family what you're doing and ask them to hold you accountable. Keep your mind open to moving and finding new niches as you talk to more people and find your path.
If I were in your shoes, assuming I had the knowledge (if you don't, hit the books first) I'd find a good deal and virtually give it away to someone who knows what they're doing in exchange for letting you look over their shoulder during the whole process. Momentum will build from there.
How do you find a good deal? First, learn what a good deal actually is. Second, grind, grind, grind.
@Mike Lorence Thank you for your input. I'll make sure to add that book to my list.
@Phil McAlister Thank you! I think thats where I've struggled with the most. Feeling that I must know everything before just jumping in.