New Investor Looking to Pull the Trigger & Buy Multi-Families

7 Replies

I'm a New Investor. I have been a Real Estate Agent for 2 years and I love it! I have also been a Supplemental Teacher at a public school district for 18 years. I have decided to make a change. My goal is to retire early from teaching. I am looking into drawing all of my money out out of my pension and rolling it over into purchasing multi-family properties. My plan is to replace my income of 100k per year over the next 5 years in multiple ways: as an investor and real estate investor agent. 

I signed up to Bigger Pockets' free membership after I purchased a single family rental in Trenton. It wasn't until afterwards that I realized that getting a multi-family was the way to go. I have a consistent positive cash flow from it. However, I am looking to build wealth with multi-families rentals. A partner and I have started an LLC and we would like to know how to purchase multi-families under a newly formed LLC. How do you borrow money under a LLC? Can someone recommend lenders for LLCs?

Residential multifamily (2-4 units) may be tough but there's ways to pull this off. Once you get into commercial mfam (5+) it's typically expected. Your best bet is to start having conversations with local/regional/community banks in your area. They should be able to give rough terms (5-7 rate lock, balloon payment, amortization, LTV, etc).

Lastly, mfam is a whole different ball game. Start reading whatever you can get your hands on in this space!

Hello and welcome to this site Taheerah!  My statements are provided to give you further education and not given as a way to hurt you personally.  I was in construction management for about 30 years in and around Dallas, Texas.  I was also a licensed real estate broker in Texas for about 30 years too.  Since I had a brain annurism and a stroke at 54, I have been studying about real estate investing full time, 7 days a week for about 5 years including book reading and that only takes about 2 weeks to read each book. 

I do not have any experience with a LLC but I would suggest that you contact several lenders and ask them what you should do to borrow money in an LLC or at first enter 'LLC borrowing" into a or several computer browsers to learn about your options. You might have to buy under a personal name and then transfer it to the LLC.

I was born and raised in Dallas, Texas.  I did learn a little from my brother and my father about real estate and my father was into mostly commercial buying and selling when I graduated from college (with honors) in Business that emphasized real estate.  I think you made a good move to be involved in buying and possibly selling apartment complexes.

One important thing thing you should do is to listen to Grant Cardone on YouTube if you do not already do that.  He almost owns 5000 apartment units and has been doing that for about 25 years.  He is a little pushy but he teaches you much about apartment owning and managing, which is done by other property management companies. 

He is predicting that he will make about 150 million this year. He owns his own TV station and does about 5 to 7 shows per week.  He suggest that you look at 3 or 4 properties everyday.  He also suggests that it should be having positive cash flow after any debt payment on day 1 before you make an offer on it.  He also uses his own jet that saves him much time and gives as much time to spend with his family.

He preaches much about cash flow and that the price is not that important.  Also to be patient and consistent are very important.  He also says you need to be persistent and much of their success is achieved with doing follow-up.  Many sales happen on follow-up which should be done about 8 times.  That does help you get the sale or get them to remember you when they are ready to make a move. 

Thanks Ivan! I will start with local banks in my area and see what products they have to help me and my partner jumped into the investment side of real estate. 

I have talked to some of my fellow real estate agents about mfam and say the same about it being a whole different ball game. :) I will most definitely begin educating myself Ivan.  

@Taheerah Amica. I have owned multifamily for 13 yrs. and having an LLC makes no difference to the bank. They will look at your personal credit and you will personally sign for the loan. The LLC is for legal/asset protection and doesn't change anything for the bank. Regarding taking money out of the pension are you going to pay penalty fees for taking it out too young? If so you may want to rethink your strategy and use a SDIRA and hold the property there. That is more complicated but doable.

Hey Michael! I just finished listening to Grant Cardone's 15 minute video titled "5 Tips to be the Best Salesperson" and I am hooked! I will definitely make a commitment to add him on as one of my daily trainers. As a natural born educator, I have always believed in the importance of being a "Learner for Life". He seems like a "beast" in real estate game and I most certainly believe in surrounding myself with likeminded successful people who are not just preaching it....but who are DOING it!

Grant is so right about the FOLLOWUP and how successful you will be by simply following up. Thanks again for your advice Michael!

@ Dennis - I am 42 and my goal is to leave teaching in the next 3-5 years. I plan to leverage my income by purchasing several multifamily properties one at a time and selling real estate as an agent.

I have a few options:

Option 1 - I can leave teaching completely and take everything out and invest it all. 

Option 2 - I can take my 18 years of service credit and defer my retirement and leave my dollars in my pension until I am 55-60.  (That's another 18 years!)

Option 3 - I can also continue teaching until 2025 when I will have 25 years of credit. I will and I will be vested in my retirement plan. (Not!)

I have to find out if there is a penalty for option 1.

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