Lighting the Path to Multi-Family Investments
When I first got started in multi-family investments, I wished I had a blueprint for how to light the path forward. Having access to a roadmap would have saved me time scouring for resources online and beyond. However, my journey inspired me to pay it forward and help others understand how to get started. These 5 key points were a big part of igniting my investment path and are imperative to consider if you are ready to get started.
1. Ignite the Idea
We’ve all had an idea that initially got us excited and energized but rapidly went to the wayside. Passion can fade quickly so it’s important to pair your idea with your motivating factor in order to move it forward. Set aside some time to reflect and write down 10 things you’d like to do when you successfully supplement your earned income with passive income. There is a scientific reasoning to writing down versus typing up the 10 things. You are inherently creating a commitment to yourself and cementing it down on paper. Keep that list and reference it often to keep you motivated. This list is your WHY. Next, determine your average monthly expenses so you know exactly how much passive income you need to become job optional. Write that number down on Post-it notes and put them all over your home to serve as reminders throughout your day.
2. Study Up
We live in a world rich with information, so the next step I recommend is reading up on what is happening in the multi-family investment space. There are some great online resources that can help you organize the basics you’ll need to know in the investment process. If you haven’t read this book yet, grab the “Commercial Real Estate Investing For Dummies” book and read through it. That book was a game changer for me. Get familiar with formulas, terms, and the processes involved. Plus, mentorship is always a great idea. I have found that learning from others in the industry has been pivotal in making smart investment decisions and navigating possible complexities.
3. Take Action
After doing proper research, many people get hung up on logistics. They ultimately go back and forth on where to invest in terms of location and can get stuck in this stage. There are so many markets and submarkets to choose from so it’s easy to be overwhelmed. In fact, that’s the number one question I receive, “Where do you invest?” The reality is, good deals exist in every city and market and one investor’s definition of a “hot market” could be stale to another. There will ALWAYS be a motived seller wanting to move on and free up some cash. Do some initial research on key market anchors such as job stability and growth and start calling agents. These key factors can be a treasure trove of information that can help you decide if the market you are considering fits your investment criteria.
4. Set Realistic Expectations
Sourcing just the right investment opportunity takes time. There will be hours of research and dozens of phone calls and emails that take place before you find “your deal.” It’s not uncommon for your first open contract to fall apart during negotiations or for there to be surprises found during due diligence. Also, remember that once the deal closes, there is more that awaits you as you stabilize the property and position it to be a high performing asset. Remembering your motivating factor and WHY you have decided to become an investor is helpful when you are buried in the details of closing the deal and bringing the property to market.
5. Surround Yourself with Great People
Real estate is a relationship business. Agents, brokers, inspectors, property managers and the sellers are all people, all of which you need to work with successfully to get a deal to close. Multi-family properties also require more money down which means you’ll need trustworthy partners or investors to go in on deals with you. Networking is a key component that is at the heart of all of this. The stronger your network is the more access you will have to high quality connections that will be helpful in cultivating a successful transaction. Start with your immediate circle of friends and family, share with them your WHY, and be transparent as to what you are striving for. They may have people in their circle you wouldn’t know about if you didn’t share. In our current time, it is more important than ever to create a virtual footprint online. Create a professional LinkedIn account and start connecting with other professionals who you want in your network. Finally, go on sites like Meetup.com to find local real estate investing clubs near you to join. One positive element in our COVID-19 impacted global climate now is that we’re all virtual, so you can literally meet other potential partners or investors from across the nation seamlessly! Take advantage of this time to intentionally build your relationship business virtually and in-person with your close circle of friends and family. Set aside a day out of the week to dedicate to making calls and connections with your circle of friends and family to share your journey, your plans, and let them know that you are open to working with them if they want to partner up with you.
Start with these 5 steps to keep you on track during your investing journey. In the words of Andy Warhol, famous American Artist, “It does not matter how slowly you go so as you do not stop.” Act. Manifest. Amplify. Every minute of our day is a gift and not a guarantee. So choosing to use your gifted moments wisely can make all the difference in the future you are creating for yourself.