If there’s one thing I’ve learned as a multi-family real estate investor, it’s that this business is not for the faint of heart – or should I say... faint of resolve? Let me explain...
This is the type of business that requires dedication, time and a great deal of effort. But the rewards and the results can be incredible, if you have the right mindset.
Hey Moguls, Chris Urso here, and today I want to walk you through 1 “do” and 2 “don’ts” when it comes to investing in multi-family properties. Like I mentioned, it will take some time and effort to work through the details of your investing business – but, the harder you’re willing to work, the more success you’ll have.
Let’s get right into it...
Much a “Do”
Obviously, your #1 goal as an investor is to find the best property deals. In fact, a question I get constantly is: “How do you find a good deal?”
Let me give you a first tip: with apartments, it’s not about the quantity of your deals – it’s about the quality.
In my real estate group, we aim to do 2-3 really good deals per year. It’s not like single-family property listings, where you can make 50 offers a week.
You have to use all the resources in your toolbelt to find those 1-2 deals that you really want to go after.
But, how do you do that?
That leads me to the “do” for today: You always want to leverage the success of recent deals – because that’s when you’re the most credible, in terms of talking to brokers and sellers.
As an example, after I closed on a property in Jacksonville, Florida, my lender shot me a quick email saying:
“Hey, I know you guys are looking for more deals. I wanted to make a referral to you of a gentleman down in the Jacksonville market who has access to several off-market deals that he’s looking to sell.”
Now, these were unlisted properties that couldn’t be found on brokerage sites or anywhere else online. So of course, I asked our lender to make the introduction.
And you know what I did? I followed up after that introduction.
I called my new connection and discovered that he had a few properties he bought a few years back and was ready to sell. He was looking for bigger deals, and he wanted me to have the first look at his current properties.
Score!
My point is: You never know who can help you get to the deal.
Utilize lenders, property management companies, attorneys, accountants and so on. Let these people know that you’re looking for deals! There’s a high probability that they have clients who are interested in selling.
And... don’t just reach out to these individuals one time. You need to do it consistently to find new deals.
If you follow this “do” and put effort into it, you’ll reap the benefits.
Steer Clear
When it comes to making mistakes while investing in multi-family properties, there really is no shortage of “whoops” moments that you could experience.
Two major “don’ts” that I see often are: inexperience and lack of dedication.
Inexperienced investors tend to get burned badly because they don’t realize the amount of labor that’s involved in setting up the right system and building effective teams. A few notes about these 2 areas...
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Multi-family investing is a team sport. And you need to be the general manager or “coach” of that team.
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You really need to go into this industry with a specific plan in place for how you’ll find deals.
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Once you have the deals, you need to understand how to manage them successfully.
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After that, you’re just managing your managers. You shouldn’t be focusing on the day-to-day dilemmas of maintenance requests, dealing with tenants, etc.
Now, let’s address the other mistake you should avoid: lack of dedication.
I often see people who don’t have the dedication that’s required to succeed in this business. A lot of people underestimate the attention this career requires, and they treat it as a hobby. (Personally, I like to choose hobbies that are much more relaxing.)
I can’t stress it enough: Every property you own should be considered its own business.
It will require the time and management that any business needs. Don’t underestimate the commitment you’re making when you acquire a new property.
The Takeaway
There is no “magic pill” that will make you rich overnight. But if you’re dedicated, you build a successful system and you create a strategic plan for finding deals, you will build wealth over time.
So Tell Me
What is your most valuable “do” and your biggest “don’t” for multi-family investing? Share below.
Jot it down. Make a list of potential contacts – lenders, real estate agents, property management companies, attorneys, accountants. Make a commitment to contact these people once a month to mention that you’re looking for deals. Then watch the leads start rollin’ in.
Craft a plan. Before even imagining the possibility of taking on a new property, create an insanely detailed plan for how you would manage it. In your plan, include team members and the specific responsibilities they would take on.
Boost that resolve. Remind yourself daily of the dedication it takes to succeed in this business. Don’t slack! Your time and efforts will be rewarded, if you stay the course.
Christopher Urso
is the founder of URS Capital Partners and National REIS. Chris has been investing in real estate since 2001. Over the years he has been involved in all aspects of real estate, from single-family fix and flips, buy and hold cash flow houses, and finally to apartment buildings. His real estate investment career only took off when he purchased his first apartment building 3.5 years ago. He now controls over $15,000,000 of apartments and has raised over $8,000,000 of private money in just over 3 years. He now structures investment partnerships to acquire large apartment complexes and also private coaches investors helping them purchase their own apartment buildings.