Young investor seeking the wisdom of others
Hello everyone, my name is Cody. I'm a 20 year old kid looking to get into multifamily. I'm hoping to be able to buy a piece of real estate with a minimum of 8 units by the end of the year. I have a job for working for Google Fiber and am currently saving as much as I can so I will at least be able to cover any vacancies and some of the renovations. My plan was to acquire a property through owner financing, and find someone whose goals align with what I'm trying to accomplish and have them cover the down payment. I don't want this to be the Cody show I want to be able to bring in partners and help them achieve their financial goals as well.
I would love any thoughts/advice/criticism. I'm open to anything you guys might throw at me. I'm eager to learn.
Thank yall so much!!
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Welcome and congrats.... That's a lofty starter goal, 8 unit MF! Do you have a price range and neighborhood?
Unless you already have the money and financing, you might want to start with smaller/easier properties.....?
Quote from @Bruce Woodruff:
Welcome and congrats.... That's a lofty starter goal, 8 unit MF! Do you have a price range and neighborhood?
Unless you already have the money and financing, you might want to start with smaller/easier properties.....?
Well the reason I chose 8 units is because I fully believe I'd be able to manage 8 units myself. I live in Wilson county about 20 minutes from downtown Nashville, and I was hoping to find anything within a 3 hour radius of Nashville. I don't really have a price range since I plan on seller financing my deals and we can move the numbers around until the deal works for both myself and the seller.
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Unit count is usually an ego driven measure many investors fall into. Buy what makes the most sense in terms of risk reward whether it be an 8-unit, SFH or something in between
@Cody Flicek I have yet to find a property that the seller was willing to finance. While it’s possible it’s usually a pipe dream.
I'd recommend looking for a good deal on a smaller property with less units that you can get either conventional financing on or a DSCR loan.
If it’s your first property I’d suggest a sfh, especially if you haven’t managed a property yourself, if that’s the case. Also do you really want to spend your time managing the 8 units with a full time job? I think your time is better spent finding /analyzing deals and making them happen. I’ve had both multi and sfh, I’ve found sf to be less headaches and better cash flow. Happy to share more if you need.
Quote from @Cody Flicek:
Hello everyone, my name is Cody. I'm a 20 year old kid looking to get into multifamily. I'm hoping to be able to buy a piece of real estate with a minimum of 8 units by the end of the year. I have a job for working for Google Fiber and am currently saving as much as I can so I will at least be able to cover any vacancies and some of the renovations. My plan was to acquire a property through owner financing, and find someone whose goals align with what I'm trying to accomplish and have them cover the down payment. I don't want this to be the Cody show I want to be able to bring in partners and help them achieve their financial goals as well.
I would love any thoughts/advice/criticism. I'm open to anything you guys might throw at me. I'm eager to learn.
Thank yall so much!!
Hey Cody, I did this exact thing in 2019 when I bought my first apartment complex. I found a partner with a high income/net worth that didn't have the time to do management or find deals. I found the deal, put together all the pieces - financing, mgt, etc and my partner brought the downpayment.
I did an 80% loan from a local bank and a 10% seller carryback. My investor brought in 10% of the down payment and we closed. I took care of everything going forward as well.
Comment above said seller financing is a pipe dream??? Not at all, just have to find the right seller. Very few will do it, but it is 100% out there.
Your biggest asset right now is your time and your hustle. If you're willing to put in the work and make the sacrifice you're going to succeed.
Great post, love the ambition. The earlier you start the better!
Don't limit yourself to targeting 8 units, as @Robert Rixer said focus on the numbers of the deal, and make sure you are comfortable with the risk/reward trade off. Will you pass up a 2 or 4 unit that is positive cash-flowing more than the 8 unit? Probably Not.
Don't overextend yourself in the beginning.
If you are strictly planning on self-managing, 3 hours is quite the distance. Focus on less than 1 hour, 45 minute drive. Being closer to the property will let you respond quicker in emergencies, tenant requests etc.
Good luck !