I have been investing in real estate through syndicate deals for many years. I currently live in NYC, but have invested all over the place. I started in NJ across the river from NYC to Brooklyn and then to Florida, Colorado, Dallas and others. Now, I would like to start taking a more active role. My concern is that it is very hard to start. I would like to either buy small multi family properties or fix and flip. My concern is that prices near me are so inflated that the returns will not be good. Im looking for an area within 2 hours that has a decent economy and the pricing is attractive enough to make good returns. Ideas?
London · Member since 2019 · 722 posts · 386 votes
7y
Eli, before we get to 'how', let's focus on 'why'. If what you are doing is working, why the switch to a more active investment style? I am not saying you should avoid being an active investor. I am just trying to get to the root of why you want to change.
If we break this down into smaller steps, getting started is well within your skills set. How can I say that? Lots of others have started from zero and learned the ropes. This is not a complex business. It is a business that rewards attention to detail. While you do not know completely what to do, you have a sense of how money is made from your syndication deals.
A little knowledge can be dangerous. Figuring out the unknown unknowns and all the dumb stuff you could never predict is an issue. Start small. Start slow. Run the numbers. Partner on a hands-on project if you like. There are so many ways.
The reason for asking about the why is it will shape where you need to focus. Some started with a 'plex or small apartment building while many others will start with a house. A few people start with small commercial. How you are wired, what motivates you and why you want to switch will provide a lot of clues.
Good luck. Remember to breath. Enjoy the journey. Read a lot on here and other places or books. Get out there and mix it up with local investors (in the target market).
Yes, but the problem is that Im not sure where to start to find deals. I have some money and lots of connections to get more of it. The issue is how to find deals that make sense.
Rental Property Investor · Baltimore, MD · Member since 2016 · 253 posts · 178 votes
7y
@Eli Miles I would start by identifying 3-4 markets with solid multifamily fundamentals within a two hour driving/flying radius from your area. Start building a team within those markets (property managers etc). While doing so, I would underwrite deals in those markets and call the brokers to let them know your background and that you are learning/ looking for deals in that market and build relationships so when a deal does come forward then you can make offers. I would also try to find an experienced team that are investing in other markets.
Real Estate Investor · York, PA · Member since 2018 · 118 posts · 58 votes
7y
yes but I think he means start analyzing the deals that are currently marketed in those areas just as a matter of getting muscle memory and learning the product in that area.
London · Member since 2019 · 722 posts · 386 votes
7y
Eli, before we get to 'how', let's focus on 'why'. If what you are doing is working, why the switch to a more active investment style? I am not saying you should avoid being an active investor. I am just trying to get to the root of why you want to change.
If we break this down into smaller steps, getting started is well within your skills set. How can I say that? Lots of others have started from zero and learned the ropes. This is not a complex business. It is a business that rewards attention to detail. While you do not know completely what to do, you have a sense of how money is made from your syndication deals.
A little knowledge can be dangerous. Figuring out the unknown unknowns and all the dumb stuff you could never predict is an issue. Start small. Start slow. Run the numbers. Partner on a hands-on project if you like. There are so many ways.
The reason for asking about the why is it will shape where you need to focus. Some started with a 'plex or small apartment building while many others will start with a house. A few people start with small commercial. How you are wired, what motivates you and why you want to switch will provide a lot of clues.
Good luck. Remember to breath. Enjoy the journey. Read a lot on here and other places or books. Get out there and mix it up with local investors (in the target market).
Thanks! I was investing for years passively, but am not generating sufficient returns to consider it a full time income. That is why I would like to start actively investing so that I can get more of the income for myself and eventually turn my real estate investments into a full time income.
Eli, before we get to 'how', let's focus on 'why'. If what you are doing is working, why the switch to a more active investment style? I am not saying you should avoid being an active investor. I am just trying to get to the root of why you want to change.
If we break this down into smaller steps, getting started is well within your skills set. How can I say that? Lots of others have started from zero and learned the ropes. This is not a complex business. It is a business that rewards attention to detail. While you do not know completely what to do, you have a sense of how money is made from your syndication deals.
A little knowledge can be dangerous. Figuring out the unknown unknowns and all the dumb stuff you could never predict is an issue. Start small. Start slow. Run the numbers. Partner on a hands-on project if you like. There are so many ways.
The reason for asking about the why is it will shape where you need to focus. Some started with a 'plex or small apartment building while many others will start with a house. A few people start with small commercial. How you are wired, what motivates you and why you want to switch will provide a lot of clues.
Good luck. Remember to breath. Enjoy the journey. Read a lot on here and other places or books. Get out there and mix it up with local investors (in the target market).
I also live in NYC, truth is, numbers here are extremely tough... no way around it for the most of the Northeast.
Within reasonable distance, I am not sure if you can hit the two-hour mark. For my part, I would consider Western Maryland, Delaware, and Pennsylvania in the Harrisburg region. That still puts you closer to the 3-4 hour mark.
Also, if you are going full-time, why wouldn't you relocate? NYC is great for raising money or working a 'normal' job, but otherwise, I think it's smart to get out and be in the community where you're investing.
@Trevor Ewen If I could relocate I would move to Miami :) But my wife has a government job in NYC and my family and kids schools and friends are here. So at this point in my life, I cant relocate. Trust me Id love to leave.
It's an old story, definitely understand how that goes.
Your best bet could be to stay passive for now and plan your next move down the line. Being active here is so hard, I am not sure if it's worth the potential upside for the sweat equity. Seems you have a good amount going on in your life anyway. May make sense to target a transition down the line and build relationships in that future location.
Investor · Fort Worth, TX · Member since 2014 · 59 posts · 51 votes
7y
Hi @Eli Miles, I agree with others about the networking at local events, Meetups, etc. One of the most powerful ways to enhance your skills and build your business is through networking. I met my current partners, Mark and @Tamiel Kenney from Think Multifamily, at a local Meetup and they've helped me close on 300+ units in the last 1 1/2yrs.
I'm not bragging...I'm just trying to show that this introduction came from a local Meetup. You never know who you'll meet and it could be the one person who has the knowledge, skills, network or whatever you need to move forward. All you have to do is find a way to bring value and the rest is history.
Anyways, good luck and let me know if I can answer any questions!
Great advice here already from others, especially from @John Corey and @Trevor Ewen. I completely second the notion of networking. It's absolutely essential to your success. You can find local REI events via BP/Network/Events or via Meetup (once you join one local REI club, it'll start "pushing" suggestions for you to join more). You can start by joining our local meetup in NYC. Cannot post it here, find it under my profile.
In terms of the location to invest. If you're only comfortable to investing locally that may be a challenge as others alluded. Read "out of state investing". If the book helps, here's a general guideline to identify the markets:
1) your backyard (if feasible)
2) places where you like to go
3) places where you have friends and family to visit
4) place where you'd want to retire
Once you have a list, do your research to narrow down the focus.