In the classroom today, Michael Blank lists and explains 8 steps that will help get you started in multifamily investing.
From the basics such as reading, all the way to making an offer on a multifamily deal, Michael Blank walks us through the 8 steps you need to get started in buying multifamily deals.
Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Michael: Hey there and welcome to the REI Classroom. My name is Michael Blank and I’ll be your instructor today. Today I’m going to talk about eight steps to getting started with apartment building investing.
Mike: This REI Classroom real estate lesson is sponsored by VirtualStaffNow.com.
Michael: So a lot of people interested, maybe they’re doing single-family house investing or rentals, flips. And they’re like, “Man, I need to step up my game. It’s just too much work, it’s not passive income. I can’t achieve my financial goals in the way I want so let me look at apartment building investments. But, my gosh, it’s so overwhelming. I don’t even know where to start.”
“Where should I start?” I get this all the time. So I kind of thought about this and here are the eight steps to getting started. All right. So the following approach is one of education and practice. And they’re both designed to expand your comfort zone. What I mean by that, a lot of people say, “Well, why don’t I do some single family rentals? That way, I get my feet wet, get some experience.” No, don’t do that. Total waste of time. There are other ways to expand your comfort zone. I’m going to talk about that.
So step number one, and we’ll start from cheap to . . . all these things shouldn’t cost a lot of money. Though eventually, you’re going to have to invest in your education, but there’s a lot of stuff here that I’ll describe that cost very little money. Number one is to read free stuff. So a great resource is obviously FlipNerd, everything that’s on here, and the forums and other people. There are books, there are podcasts. Podcasts are all free. That’s a great way to get stuff and the books are cheap. So read the free stuff. Find peoples’ blogs, find my blog at TheMichaelBlank.com. Find other peoples’ blog that share about their experiences.
Step number two is you actually might want to buy a book. You go to Google and you Google “apartment building investing” or something similar. That will give you a good overview as well.
Step number three is to network with other investors. So that’s attending your local real estate investor meetings or search meetup.com for other investors that get together and soak it all in. After a while, you’ll figure out which one, there are not that many, normally, in these REI meetings is which one your commercial real estate investors are and then take them out to lunch. Pick their brain.
Step number four is attending a seminar. So once you’ve made up our mind that this is actually a pretty good strategy and you need to educate yourself, that would be time to start spending some money. A great way to do it is to buy a course or to attend a seminar.
Step number five is now we’re kind of at the end of our educational section and you’ve got to take some action. So I kind of draw a line going, “Okay. You’ve got the knowledge. You’ve got your course, you’ve got your seminar. Good for you. Now cut it out and go take some action.” Now, the first thing you’re going to do is to expand your comfort zone and get practice. Practice analyzing deals. So you’re going to get financial packages from, say, loopnet.com, from brokers and you’re going to analyze those deals and you’re going to make offers.
And the second thing you’re going to do, step number six, is to create a sample deal package. What that is that you’re actually taking financial is you’re creating projections and you’re creating a package for your investors. Now the deal does not have to be a real deal, meaning that you don’t actually have to have it under contract.
It just has to be a real deal you get from a marketing package and you create an investor package from that, and you use it as a tool to talk to investors. It’s a great tool to do that and in the process, you’ll get very familiar with that one deal. You’re going to crunch the numbers, you’re writing it.
Look at the property, which is step number seven, is tour a property. Go there, spend a couple of hours or crunch the numbers. Create a deal package and it really expands your comfort zone very quickly. Do it a couple times and your 12-unit that you’re looking at seems small. Trust me on that.
Step number eight is to make some offers. You may not really know what you’re doing but you have some education. You’ve practiced analyzing deals. Go make some offers. The worst that can happen is that they’ll be accepted. All right? Isn’t that kind of the worst thing that can happen? You could always say, “Oh no, I’m good. I was just kidding.”
So at the end of the day, it’s all about educating yourself to a certain degree and then taking practice and then practicing what you learn. So here’s a final tip. Always focus on your next three tasks, meaning that all this thing can be very overwhelming to get into it and just forget about all that stuff. Just focus on the next three things you want to accomplish this week. Write them down, knock them out in that one week and create your next three things that you want to do.
After about three months, you’ll look up and you’ll be amazed at how much you’ve accomplished. So hopefully, with these eight steps and the final tip, it will get you on your path to apartment building investing. Well, thanks very much and I’ll catch you in the next episode.
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