Flip Tip Summary
Is multi-family real estate investing for you? There are many misconceptions with apartment investing, often around how challenging it is to get started. In this FlipNerd.com VIP Flip Tip, Brad Sumrok, experienced multi-family investor and highly sought after mentor and coach shares the 3 most common ways to get started. Check it out!
Flip Tip Transcript:
Mike Hambright: Hey, It’s Mike Hambright from FlipNerd.com, and we have a quick V.I.P. flip tip to share with you from Brad Sumrok who is going to share a tip on how to determine if multifamily real estate investing is for you.
Brad Sumrok: Thanks, Mike. Well, to me there’s three ways to be a multifamily investor. One way is to buy your own deal with your own money, and that works for people that actually have say, 20% down to invest.
Now, some people don’t have all the money to do the deal, so maybe previously they didn’t think they could be an apartment investor, but you can. That’s why I believe that multifamily investing is possible for just about anybody.
The other way if you don’t have all of the money is to be a deal sponsor. A deal sponsor is the person that finds the deal and then they oversee the asset, and they do all of the work.
So if they don’t have the 20 or 25% down they raise the money from other people, so now people have another option to say, “Hey, I don’t have all of the money. I’ve got to do something else.” No. You could be a deal sponsor.
The other way in that sponsorship is you could actually be a passive investor. Passive investing is a great diversification strategy. It’s great for people that don’t want to do all of the work and don’t want all of the responsibility of putting the deal together.
They simply, after learning the basics, they simply find somebody they trust and they put their money into a deal as a passive investor. Again, a lot of people are like, “Oh, real estate. Tenants, toilets, taxes, I don’t want to deal with all of that.” Well, as a passive investor you don’t have to deal with it. Truthfully, even as a deal sponsor I don’t deal with much of it either because the management company deals with it.
You could be a deal sponsor, an individual without any investors, or you could be a passive investor. By the way, if you have an I.R.A., a self-directed I.R.A., then you could use your I.R.A. as a passive investor. Those are the three ways to invest. I’m sure that anyone could find a fit into being a multifamily investor into one of those three categories.
Announcer: Thank you for joining us for another FlipNerd flip tip. We’d also like to thank our featured sponsors, Home Depot, Personal Real Estate Investor Magazine, and UglyOpportunities.com. To watch or listen to more FlipNerd.com flip tips or full length interviews with the most successful real estate professionals in America, please check out FlipNerd.com or the FlipNerd podcast in the iTunes store.
Brad Sumrok: Thanks, Mike. Well, to me there’s three ways to be a multifamily investor. One way is to buy your own deal with your own money, and that works for people that actually have say, 20% down to invest.
Now, some people don’t have all the money to do the deal, so maybe previously they didn’t think they could be an apartment investor, but you can. That’s why I believe that multifamily investing is possible for just about anybody.
The other way if you don’t have all of the money is to be a deal sponsor. A deal sponsor is the person that finds the deal and then they oversee the asset, and they do all of the work.
So if they don’t have the 20 or 25% down they raise the money from other people, so now people have another option to say, “Hey, I don’t have all of the money. I’ve got to do something else.” No. You could be a deal sponsor.
The other way in that sponsorship is you could actually be a passive investor. Passive investing is a great diversification strategy. It’s great for people that don’t want to do all of the work and don’t want all of the responsibility of putting the deal together.
They simply, after learning the basics, they simply find somebody they trust and they put their money into a deal as a passive investor. Again, a lot of people are like, “Oh, real estate. Tenants, toilets, taxes, I don’t want to deal with all of that.” Well, as a passive investor you don’t have to deal with it. Truthfully, even as a deal sponsor I don’t deal with much of it either because the management company deals with it.
You could be a deal sponsor, an individual without any investors, or you could be a passive investor. By the way, if you have an I.R.A., a self-directed I.R.A., then you could use your I.R.A. as a passive investor. Those are the three ways to invest. I’m sure that anyone could find a fit into being a multifamily investor into one of those three categories.
Announcer: Thank you for joining us for another FlipNerd flip tip. We’d also like to thank our featured sponsors, Home Depot, Personal Real Estate Investor Magazine, and UglyOpportunities.com. To watch or listen to more FlipNerd.com flip tips or full length interviews with the most successful real estate professionals in America, please check out FlipNerd.com or the FlipNerd podcast in the iTunes store.
