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Strategy Saturday
SS9: How to Perform a Self-Evaluation Prior to Investing in Multifamily Real Estate
February 14, 2021
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Charles discusses how a self-evaluation is imperative to successfully investing in real estate; by helping to narrow your property focus.

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Transcript:

Charles:
Welcome the Strategy Saturday, I’m Charles Carillo. And today we’re going to be discussing how to perform a self evaluation prior to investing in multi-family real estate. So a self-evaluation is something that’s overlooked all the time, and it prepares you to invest. It gets your mindset in the right position and figures out what you’re able to do in the whole process of purchasing a multifamily property. So what are you actually bringing to the table? You need to define the criteria number one of what you’re looking for. So what areas are you targeting? What property size in those areas? Property classes mean there are over two and a half million multi-family properties in the United States and you can’t target them all. What can you actually close on? You need to review your resources and your team’s resources as well. What does my team look like? What is our net worth collectively our liquidity.

Charles:
How much money do I have? How much money does my team have? How much experience do I have? How much experience do they have? And you’re going to find that there might be holes with this that you’re going to have to fill before you start actually looking for properties with the ability to actually close them. How much money do you have access to? If you’re raising money, you need to send that over 50% of your first investors will not follow through. This is something that I think a lot of new investors always overlook, and it’s a huge red flag. When I speak to someone and they tell me as a new investor, all these investors, they have lined up because it’s not that easy to raise money and it takes time. What are your skillsets or are you going to cover all parts of the property purchase process yourself?

Charles:
Or are you going to have someone else assistant or you’re going to outsource it? So the underwriting, the money to close the management. Are you an outgoing or analytical person, usually with an outgoing person, they’re going to be doing a lot of the deal sourcing and money sourcing. Well, an analytical person is going to be doing a lot of the underwriting. What is your available time? Do you work full-time, is it set in stone as a nine to five? Or is it flexible if it’s flexible? Are you able to take calls from property managers, lenders, brokers, or you’re able to go out to properties and speak to property managers and other contractors, what gaps in your team are there and how are you going to fill it? Networking is a huge thing and one of the best ways of doing it. So going out and knowing before you go to a networking event, what you’re really looking for, what gaps you have in your team and finding someone that can fill those gaps for you.

Charles:
So you’re able to actually close a property and knowing that when you have people that are different mindsets on your team, it’s going to be even easier for you to really focus on what you’re good at. What are your target returns is another thing that’s, that’s overlooked sometimes, but it’s very important because it’s gonna be one of the first things a broker talks to you about when you speak to them and or your cash on cash returns for the same for smaller property or a larger property. I know for our team, it definitely isn’t. We want to have a higher cash on cash return for smaller properties because of the elevated hassle factor. And you have to figure out what property sizes and what returns are you going to be looking at for every different market that you might be in. And when you’re doing that, no, when you’re speaking to the broker, this information, and when speaking to other people in potential team members, the more exact and detailed you are, the more professional you’re going to come off. And that’s what definitely what you want to do when you’re dealing with multifamily and commercial multi-family real estate. So I hope you enjoyed this episode. Please remember to rate, review and subscribe, submit comments and potential show topics at global investors, podcast.com and look forward to two more episodes next week. Thank you.

Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar incorporated exclusively.

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