5 Ways to Get Started With Multifamily Investing
The world of Multifamily syndication seems like a land of limitless possibilities, and because of this most people get paralyzed at the starting line. Today we dive into 5 easy ways to get you off the starting blocks and into your first deal.
1. Break down your goals so they are actionable
When it comes to Multifamily investing you need to have SMART (specific, measurable, achievable, relevant, and timely) goals. This means you have to be realistic about what you want to accomplish in your investing journey. Most people tend to overestimate what they can do in a day while underestimating what they can accomplish in a year, because of this, we recommend starting with a 12-month plan. If you are just starting, maybe your goal is to LP your first deal within 12 months. Great now map out what you need to do each day in order to make that possible. Keep in mind this shouldn’t overwhelm you but rather show you how much you can achieve if you work on it each day vs just having a lofty vision in mind. Each day take action, don’t get stuck at your end goal that’s 12 months away, focus on what you can check off each day.
2. Get Educated
There is no shortage of deals within the world of multifamily investing the trick is finding out what opportunities are a GOOD investment and what role you can play in the deal. Before committing capital to deals you should have a good understanding of how syndication works so you don’t walk into a bad investment. There are a ton of free resources you can leverage for this, check out our previous blog post here for some easy ways to get started. Keep in mind don’t get overwhelmed by all the educational content floating around. Ensure you are sticking to your 12 month plan, maybe you are consuming a book, podcast, and 3 articles each month while taking actionable steps towards your first goal. No matter how much education you receive you still need to turn that education into action!
3. Understand Your Why
What is the driving force behind your investments in multifamily investing? Do you just want some mailbox money or are you trying to quit your job in 3 years? There are a ton of ways to make investing work for you but you need to make sure you are looking for deals that get you closer to your WHY. For example, if you want to get into multifamily investing because your long-term goal is to have more time to spend with your family, investing in properties that require a bunch of your time doesn’t get you closer to your why. Maybe you are willing to sacrifice a few % off your ROI if you get into deals that don’t require as much of a time commitment. This is why understanding your WHY and goals around investing are important when it comes to deal evaluation. ROI forecasts don’t tell the entire story, understand what is required from you as a GP and ensure that aligns with why you are investing in the first place.
4. Start Investing Passively
LP investing is a great way to get a better understanding of the multifamily syndication process without all the pressure of being a GP. For your first deal, we recommend coming in as a passive investor. This will allow you to learn from the GP team, and get a much better understanding of the process before you become responsible for the heavy lifting. The other benefit of LP investing is that you can expand your network of partners for when you are looking to syndicate your own deal.
5. Partner with an experienced investor
No matter how much you prepare for your first deal odds are something will come up that you need help with. This is a team sport, it is very rare to find someone who is an expert at every step of the syndication process. Use partners to fill in skill gaps and get your deal over the line. If you know you are amazing at raising capital, go partner with an amazing operator to cover that skill set. A great partner is worth their weight in gold, they broaden your network and give you a trusted source of information. The benefit of a program like Apartment Educators is you get instantly plugged into a mentor/peer group so building a team is much easier! Figure out where you can go to find partners.
Regardless of the route, you choose the most important thing you can do is get started, don’t get stuck at the starting line trying to figure out the perfect deal. Send out a bunch of LOIs, read books, go to meetups, immerse yourself in the space, and get started. Take advantage of your momentum check out our next free meetup here and signup for our free online program by clicking here.
