In this growing industry, there is a lot of information that can consume you. When prospects ask me how to get started investing in multifamily real estate, there are four key steps:
The process looks like this:?
- Find an investor group or mentor
- These groups and your team are so important because commercial real estate, specifically multi-family commercial real estate, is considered asset based lending. Because of this - you have no personal recourse. This means when you sign your name on a loan, the lender is looking for you to be an experienced investor.
- When you find the property you like, you're going to need to have a property manager that can provide a good budget for you.?
- An attorney can write your LOI to get you under contract.?
- A mortgage broker can tell you what type of financing you can provide that specific property.?
- You will also need an insurance agent to give you pricing on the insurance.?
- If the property manager doesn’t have a contractor, you’ll need a contractor to assist you with various property repair needs.?
3. Financing & due diligence?
- It's time for you to assemble a budget. Find out what your insurance costs and construction/rehabilitation numbers look like so you know what to offer for the property.?
- Make sure you understand what your financing terms will look like, because that could make or break your deal.
4. Make an offer on the property
- Remember: Don’t be too quick to get a deal done without thinking about ensuring your investors make money and their returns are boosted.
