Are you interested in investing in multifamily investment properties? If so, you’ve come to the right place!
Multifamily continues to be one of the best investments simply because of the fact that everyone has to have a place to live and regardless of the city or state, a multifamily property is a great investment because it provides people with something they absolutely need.
The truth about investing in multifamily though is that you can study all you like but the reality is that unless you take action, you’re not going to get your first multifamily deal. This is why in this article we will provide you with steps that you can follow and use to get your very first multifamily property deal.
Step 1 – Develop Your Knowledge and Learn to Speak the Lingo of The Multifamily Industry
As with getting started in any new industry, you absolutely have to learn to develop your knowledge of the multifamily industry and learn how to speak the lingo. This is essential because you’re going to encounter many new words like “cap rate” and you will be expected to understand those words so it’s better to develop your knowledge now rather than being left to scramble for definitions to words later.
Step 2 – Start Talking with Brokers NOW
Although you may be planning on investing in your first multifamily property in 3-6 months, the reality is that you should start speaking with brokers now. Why? A broker is essentially a “gatekeeper” for the industry and a HUGE source of information so it’s best to introduce yourself to brokers in your city, state or town now so that they will already know you when you’re ready to start searching for properties.
Before meeting with a broker it’s best to research that individually thoroughly before you sit down with them. Your pre-meeting investigation should include learning more about their background, reviewing their listing materials and diving into everything that you can about them.
When your meeting day arrives, you want to show the broker that you’ve done your research on them you understand their business and are serious about investing in multifamily real estate.
Step 3 – Be Ready to Show Proof of Funds
You may have the funds ready to invest in a multifamily property but the reality is that without proof of funds, the seller will have to take your word for it. To avoid problems with sellers, it’s best to receive a proof of funds letter from your bank so that there’s no question about your ability to close the deal
Step 4 – Establish A Team
Besides the steps that we’ve recommended in this article so far, another helpful thing that you should do before investing in multifamily is to establish a team. This is another essential step because most lenders won’t want to lend to someone who is brand new and never managed a multifamily property in the past so it’s best to establish a team or hire a property management company to manage it for you.
Step 5 – Use A Multifamily Deal Analyzer
Once you’ve assembled your team and are ready to start looking for properties, it’s best to have a multifamily deal analyzer in place that you can use to determine if a deal is right for you to invest in or not.
There are a wide variety of deal analyzers out there today, especially on sites like Bigger Pockets, one of the best that you should consider using is Michael Blanks. His deal analyzer will help you to cut down on the time that it takes to analyze deals from hours to just a few minutes.
After you’ve acquired a deal analyzer it’s best to start analyzing as many deals as possible. Start searching for them online, contact the broker for each deal to request their marketing package and learn as much as possible about each deal.
Multifamily is a “numbers game” just like any other industry and the key to success in this industry is analyzing as many deals as you possibly can. A general rule that many investors follow is that if you can analyze 100 deals, the odds are high that you’re going to close one.
Also, remember to invest the time into finding deals as well. By treating multifamily as a business, you will be able to start investing in your first multifamily property