Driving down the road, telephone poles are everywhere. However because they are so commonplace, you often overlook them completely. However, if you were trying to look for them, you would find them everywhere. Multifamily investment opportunities are similar to telephone poles in that they are all around you, but most investors overlook them for a variety of reasons.
Here are a few reasons we’ve identified as to why investors often overlook multifamily investment opportunities:
- Investors don’t know how to differentiate between a good investment opportunity and a bad investment opportunity.
Not all opportunities are good opportunities. You need to have a system in place for evaluating deals and have set criteria regarding what you are looking for, and what you expect to receive from the investment. - Investors think multifamily investments are too big for them.
Buying multifamily properties requires an investor to put 20%-25% down. For most people, that can be a tall task to do alone. But, by bringing like-minded investors together, you can pool your resources together to buy large, cash-flowing assets where everyone benefits from the size and leverage provided by the property. Would you rather have your investment growing in a single family home appreciating at 2-3% per year, or a multimillion dollar apartment complex doing the same? - Investors don’t want to take care of tenants or maintenance calls.
Some investors think that they have to do everything. They think they are going to be the ones collecting rents, receiving maintenance calls, and running out to fix a leaky pipe. The truth is, with multifamily properties there is a budget for a management company, manager, and maintenance person to do these things for you so that you can do more of what you love. The key is finding the right property management company or manager for your property. - Because of the size of the multifamily properties are too complicated to understand or handle.
Large multifamily properties are not any more complicated than other rental properties; they are just bigger. Once you learn the fundamentals and have your systems in place, it can be as easy to run a 150-unit apartment complex as it is to manage several single family homes, and can be even easier because all of your tenants are under "one" roof. With the 150-unit apartment complex, you have the economies of scale to hire managers, maintenance people, and a management company, and still get a solid return on your investment. Also, a few vacancies won’t affect the bigger complex nearly as much as your rental homes that are either 0% or 100% occupied.
I’ll let you in on a little secret… Multifamily investing can have a steep learning curve, but the process can be significantly shortened by not being a "do it yourselfer." Our team has spent years learning the business and has worked diligently to surround ourselves with partners and team members that have the expertise we need to streamline the process.
The way we look it, instead of letting opportunities in multifamily investing pass you by and allowing them to become commonplace like telephone poles, we have worked to become experts in this area. Why not work with a type of real estate investing that can make you much wealthier, much faster than your typical single-family home investments?