Looking to Invest in a Multifamily, Somewhere!
Dallas, TX · Member since 2020 · 10 posts · 9 votes
Hey everyone!
My family and I just purchased our first home here in the DFW area. With the market being as crazy as it is, purchasing this home was an absolutely insane process that thankful we made it to the end. Our goal now is to purchase our investment property, preferably multifamily. However, I am nervous that DFW won't be the ideal place to find one. Does anyone have any advice on which markets are promising right now or what we should be doing to reach this goal?
@Alysha Johnson we live in Dubai, so trying to figure out where to invest was even more tricky from here, especially as I've been dealing with tenants for over 20 years, mostly from somewhere abroad. About a year and a half ago I started looking for rentals - I read books on buying properties long distance, and developed a great friendship with an Aussie BP member, who's based in NY (my husband is also Australian), all because our plan WAS to buy a bunch more rentals and use the income for our retirement. He owns over 20 rentals, and we were discussing buying some properties with him, which would have been lovely, a lot of work, but also something to do to create wealth.
Someone, and I wish I could remember who, because I would thank them, suggested I consider multifamily syndication, especially as we live abroad (moving back to the US next year). Having grown up with a Dad and Grandma in real estate, owning rentals was all I ever considered. I was also the Sales Director for a real estate company here in Dubai, so real estate is really something I'm passionate about.
Long story short, I switched gears and spent nearly 2 months on long calls with syndicators, 2 CPA's, investors, capital raisers, and a lawyer, before not only investing in one (in Dallas, as it happens), but also going so far down the rabbit hole that I not only wanted to invest, but also wanted to introduce other people to MF syndications. Why? Because once I realized, after millions of questions, that it was a great way to make the same, if not more, money than I had been in rentals (I'm not a house flipper, nor a rehab and rent sort of person, was more a buy and hold investor), with the same tax advantages, gaining access to some of the hottest markets in the US, with syndicators doing way more data driven due diligence than I ever would as a landlord, then I wanted to shout from the rooftops for other people to hear about MF syndications, like I did. It really has been a big shift in headset for me, and I became an SEC Registered Rep, at 52, specializing in private placement capital in MF syndications, with a select few syndicators.
You can find great opportunities in local markets, and I still get daily updates from Roofstock. But for me, and a lot of others (CBRE report says $148B investment into MF in 2021), MF investing has become the only way to get monthly income and participate in what's akin to a slow flip.
Just food for thought. Having spent tens of thousands on repairs over the years, I like the idea of still investing in real estate without dealing with tenants, repairs, and vacancies. We plan to sell our rental, and invest proceeds into 5 or 6 syndications. The advantage, too, is that if you buy in the right markets, you will be investing into growing job/population areas, where people will always need a place to live, and rents tend to be much cheaper in these markets than buying SF homes, so there will always be a demand, meaning low vacancy risks.
Agree, Phoenix has been very hot, every single deal we bring to investors are over subscribed within a few days, as we work with a great local operator there who focuses in that area, only. There are other well-established operators out there (we work with 9 in total), operating both in individual deals and funds, across a multitude of geographies. We also use 3rd parties to vet both the properties, the financials, and the syndicators. As SEC registered reps, we are required to perform a significant amount of due diligence on each deal and operator.
Personally, I'm about to invest in one or two funds, for the broadest diversification, as well as a few individual deals. The location is, indeed, important. But the demographic data and financials are also important. So is the deal, the assumptions, the track history of the syndicator, whether or not the property was acquired off market, amongst other things.
I also refer investors to other syndicators we don't raise for, if they operate in either a market we're not in, or an asset class we don't raise for. Plenty of opportunities for everyone out there. :)
We tend to work in Class B value-add, in markets set to grow for years to come, over 150 units plus, with a few exceptions, self storage, for example. I've seen a lot of deals out there, some fantastic, some I wouldn't touch with a 10 foot pole.
@Alysha Johnson Here you go! https://www.biggerpockets.com/...