The key to successfully getting into the multifamily real estate market comes down to three things: time, consistency, and patience. Setting up a weekly multifamily investing schedule can help you practice all three of these.
Try this multifamily investing schedule to help you focus your efforts, build your network, and find the right property for your next investment.
New investors will need to get to know markets to determine where they have the best potential return on their investment dollars. Start your week by picking one or two markets that interest you and dig deep into their data. Your multifamily property market research should include:
- Submarket data. Look at the sold and rent comps, the average price per door, average cap rates, and average asking rents. This can help you pinpoint specific neighborhoods that offer the best ROI.
- Market news. Staying up-to-date can help you make smarter investment choices. It may give you insight into potential issues looming in the future, too.
- Market trends. What are renters looking for in properties? What is the market doing in your target areas? Look at both local and national trends.
- Real estate cycles. Become familiar with real estate cycles in your target markets. Is the market moving out of recession and into recovery? Or is it moving from expansion and into hypersupply? Understanding these cycles can help you pinpoint the best times to buy and sell.
- Renovation trends and strategies. What are other multifamily property investors doing to bring in their target demographic? This can help you plan for your future properties more effectively.
Spend time reaching out to industry insiders and experts. Investing isn’t a solo venture. You’ll build your portfolio more effectively when you have a trusted team around you. Industry insiders can answer questions and help you avoid issues that would trip up a “lone wolf” investor. Put your email, social media, and phone to use. Start connecting by:
- Joining investment groups and clubs. Connect with other investors who can advise and support you. Sometimes it’s just nice to know someone who understands what it’s like to be an investor in this market!
- Join industry associations and attend events. This is a great way to build your network quickly and learn a lot in the meantime. The NAAhq is a perfect place to find multifamily industry-specific events.
- Reaching out to friends and family. The people you already know are often your best resource for investment information! They might be able to connect you with someone who is doing exactly what you want to do.
Wednesday: Source Deals
Networking is the best way to find deals, but your multifamily investing schedule should also include time looking online. This can help you discover new investment and networking opportunities.
- Connect with brokers, either online or in-person. It may intimidate some beginning investors to approach multifamily brokers for the first time. The good news is they are people, just like you. Remember that you are interviewing them to see if they are the right fit for your investment network.
- Look for property listings online. This isn’t always an effective way to find a property. But it is a wealth of information for a new multifamily property investor! They’ll help you learn more about potential markets and research important data like cap rates.
Thursday: Deal Analysis
Analyzing multifamily property deals is an art form, and it’s one that you’ll only master if you practice. So practice, practice, and then practice some more. Set a day aside in your weekly multifamily investing schedule to analyze a deal in your specific asset class and submarket of choice. Over time this will give you more confidence when you go to make an offer.
When practicing deal analysis for multifamily properties, make sure you:
- Take notes about your observations and questions regarding the property.
- Get comfortable working with deal analysis spreadsheets.
- Think about what renters want versus what the market is currently offering.
- Understand how to do a proforma analysis to project your potential ROI.
Friday: Build Your Investment Library
Spend a day building up your personal multifamily real estate investment library. This resource will help you build and expand your knowledge base. Even investors who have portfolios going back 20 years or more continue to expand their personal investment library. Smart investors know they are never done learning. Stock your library with:
- Real estate-specific how-to articles and blog posts
- Forms and documents used by landlords and deal sponsors
- Current info on local housing requirements and fair housing compliance
- Research and analysis tools used in investing and managing a portfolio
- Tracking and updating your contact’s information
Consider your own blog, podcast or YouTube channel, too! Share what you are learning about multifamily real estate investing. It’s a great way to network, connect, and reinforce your own knowledge.
Build Consistent Habits, Build a Better Portfolio
Remember that investing is about time, consistency, and patience. Consistent habits will help boost your bottom line in the long run. If you get off track, don’t be hard on yourself and don’t give up. Get back onto your established multifamily investing schedule and keep moving forward with research and networking.
Connecting with an accountability partner or mentor in the industry can help, too. They can keep you focused and help you avoid common first-time investment pitfalls.
Looking for more help as a beginning investor in the multifamily real estate market? Contact us today. We help both experienced and first-time investors meet their long-term real estate goals. Set up a consultation to learn more about how we can help.
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