Most times, when “Commercial Real Estate” pops up in a conversation, Big-Institutions, Wealthy- People, automatically, come to mind. Not a lot of people know that anyone, and I mean, ANYONE, can purchase a big, Institutional-looking property! Let me explain…
You see, most humans think that the biggest property they can own, is their, 3 bedroom, 2 bath house. If your a little more sophisticated than that, than you can think own up to 4 units. Anything bigger than that, becomes a commercial property, which they automatically deny the possibility. However, right now, in the next few minutes, I will tell you who can, and then how you can…
Who can? Anyone can. But you will need to know 2 things. Do you want to actively participate in everything? (sourcing the deal, negotiating price, sourcing debt/equity, stabilizing the asset, overseeing day-to-day operations, and disposition) Or, do you want to passively invest? (Help fund the equity needed to close/operate the deal). Which ever you choose, is solely up to you, and should align with your long-term goals.
If you want to be an active partner in these deals, seeking the right education/people, will help you accomplish more in this industry. First, you do want to identify your skills. Are you a people person? or are you an Introvert? Do you have experience managing people, or managing real estate in general? Do you have experience with numbers? Where is your experience?
On the active side of multifamily real estate, there are 4 areas that help create a team.
1. Acquisitions – These people are sourcing the deals, talking with commercial agents/brokers. They are also sourcing the debt, insurance, looking at property taxes in the market.
2. Analyst/Underwriter – These people are analyzing financials of the subject property, and entering all assumptions into an Excel model, which essentially spits out returns that the property could generate, if the business plan is effectively executed.
3. Investor Relations – These people are sourcing the equity for current/future opportunities. They are creating relationships with potential investors. They also take care of all communication between the progress of the properties and the investors.
4. Asset Manager – These people oversee the property manager/day-to-day operations, making sure to execute the business plan.
If any of these resonate with you, get out there and start networking!!
Now, If you are looking to be a passive partner, here is “who”; and “how”…
Who; If you are someone that has a minimum of $50K, you are eligible to participate as a passive partner. Now, you’re probably thinking cash. Well, that is not the only way. You are also able to use retirement funds to participate (401K, IRA, Roth IRA, Self-directed IRA).
How; Since you have figured out the money part, now you need to find WHO, is actively looking for deals. Here are a couple of ways to find these people…
1. Social Media – If you type in “Multifamily Investing” in the “search” bar, you will find a company.
2. Networking – Going to real estate networking events, you are bound to find someone that is participating in multifamily real estate.
Now that you have found them, reach out to them, they will be ecstatic!; I promise! Schedule a call, and let them know you want to participate, and have them send you any opportunities they currently have.
Get out there, and make it happen!
Frank Teshima
Founder
