Multifamily investing has always been your big dream. You’ll buy an apartment building. Quit your day job. Create a legacy. All while receiving thousands of dollars every month as you sit on the porch with your feet up enjoying your carefree retirement. But like everything else in life, it won’t be a cakewalk.
Tough road ahead
Ever hear of the infamous “Truckers Don’t Be Fooled. You’re Not Down Yet” signs? They were created as a result of a really bad high-country trucking accident near Denver back in 1989. The warning sign is a great analogy for your first foray into multifamily investing. You may think that you’re out of the mountains, but you’re really not. Before you know it, you’re going down the steep incline and you lose control like the trucker.
The gurus want you to think this is a flat area, that it’s smooth sailing. Sure, you can see your goal in the distance, clear as day. But you can’t overlook the steep gradient and tight learning curves ahead. Or you will fail. As a real estate investor, recognize that you have a tough road ahead, but your awareness is what’s going to help keep you safe and avoid risk.
5 keys for multifamily investing success
1: Acknowledge that YOU are the weakest link
You must treat multifamily investing like a genuine business and be 100% self-motivated, with no quit in you. You will stay in action – it’s non-negotiable. Period. Plain and simple.
2: Just do it and don’t be afraid
Stop doubting that you can be a successful multifamily investor. Don’t hesitate to pay an A-team of excellent brokers, contractors, and managers because you think it’s too expensive. Get rid of your skepticism and understand that it takes money to make money. In the end, you’ll be glad that you did.
3: Understand that being in the real estate business isn’t a walk in the park
Even if the first few attempts to acquire your investment property don’t turn out well, keep going. Your time will eventually come. The only person who can stop your success is you. So if you fail, don’t blame anyone or something else.
4: Don’t hesitate to ask questions
Your teachers advised you against committing that mortal sin for a reason: closed mouths don’t get fed. How do you expect to learn the industry if you don’t ask questions?
It doesn’t matter if you feel like an amateur. It doesn’t matter if people think you’re an idiot. Ask away until you get the answers you’re looking for, no matter how long it takes. Be annoying if you have to. So if you don’t understand some contract, something your manager is saying, or any process of the property takeover, swallow that fear of feeling and looking stupid and gain that valuable knowledge. You’ll need it!
5: Keep your emotions in check
Like in life, things in multifamily investing aren’t going to always go your way. Some properties cost more than they’re really worth. You may need to put money towards repairs and renovations because of a horrible natural disaster. Things happen. You won’t be able to prevent them or control them. So if nothing seems like it’s going your way, think of things from a financial perspective. After all, real estate is risky business. You knew this when you got in.
Questions to ask yourself
Are you clear about what you’re getting into? Can you network like there’s no tomorrow? Accept risk? Make offers on million-dollar deals? Hire and lead a team? Do you have money? Can you ask people for money? Do you know people with money? Do you have the liquidity for unexpected cash calls? Is your credit good and do you have business experience? Realistic expectations and goals? Prior experience owning investment property? Is there a day job you’re scared to let go of? Kids to look after? An entire family depending on you?
Are you ready for this?
Make sure you have tons of time. Be ready to invest money including earnest money, due diligence expenses, and closing costs. Don’t buy the first deal you see. Read our entire blog. Assess your tolerance and capacity for risk and ask the right questions (found in our Fast Start Program). Commit to the long haul. If this were easy, everyone would own apartment buildings.
Pro tip: You can’t quit. You have to keep learning, networking, studying markets, and looking for deals – even after you become a property owner!
Not for the faint of heart
Real estate investing isn’t for the faint of heart. It’s the survival of the fittest. Sometimes, it can take over your life. Other times, you’ll feel like you have no life. But if you’re willing to put in the hard work and dedication, take criticism, spend money, deal with disappointments, and other stressful things associated with multifamily investing, then chances are, you can go far in the industry.
You just might be able to achieve that life of never stepping foot into an office – except yours – ever again.
Like with any other business venture, you’re going to have doubts. It’s only natural that you do. But if you really want to create an additional income or build a legacy for yourself, your children, and future generations, you must keep your eye on the prize. At Theresa Bradley-Banta Real Estate Consultancy, we can help you do just that. Contact us today.
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