How I Went From 3 SFR’s to Over $400MM in Apartments in 4 Years
Over the past four years, I have learned a lot. Four years ago, I owned 3 single-family homes. Flash-forward to the present, I control over $400 million in apartment communities. While it would take much longer than a quick blog post to explain, in extreme detail, how I was able to accomplish this growth, the following is a 3-step, high-level approach that ANY investor can follow in order to replicate my success.
Step 1 – Get Your Hands Dirty
On my first multifamily deal, a 168-unit, I assumed all responsibilities. I did everything, which included raising the capital from private investors, managing the property management company (i.e. ongoing asset management), performing the due diligence and underwriting, securing the financing from the lender, and essentially putting together all the pieces that make for a successful deal.
One benefit of starting off by getting your hands dirty and doing everything yourself is that it forces you to confront, and ultimately conquer, your fears and limiting beliefs about real estate investing. If you had any doubts in your mind that you weren’t capable of raising money, finding a good deal, communicating with different lenders, brokers, property management companies, etc., upon closing the deal, those will all be demolished. If you can just push yourself to do it once, you will gain the confidence to do it again and again.
Another benefit is the hands on, real world education. While reading books and listening to podcasts, for example, are amazing educational tools, there is nothing quite like tactile, kinesthetic learning. You will be fully immersed in multiple facets of real estate, which will be of great importance moving into step 2.
Step 2 – Identify What You Are Really Good At
By getting yours hands dirty during your first investment, you will understand, first hand, what it takes to successfully, or unsuccessfully, complete the different aspects of closing and managing a deal. In doing so, you will understand which aspects you like and dislike, and more importantly, what you are good and no so good at.
Personally, I believe that we all have special talents and are really good at one thing. I also believe that we are all here with the purpose of applying that “one thing” to improve the world. Therefore, the next thing that I did was determining which “hat” (aspect of real estate) fit me best. For me, it is sales and marketing. As a result, I focus my energies on tasks like my daily podcast, these blog posts, YouTube videos, etc. That “one thing” is what I utilize in order to grow my business by bringing in more private money investors, buying properties together, and sharing in the profits.
Step 3 – Fill In the Blanks with Experts
The final step, after identifying what I was good at, was bringing in team members who could complement my background with their expertise. In other words, I brought on experts who could “fill in the blank” and assume the responsibilities that I discovered, from step 1, that I didn’t like or wasn’t good at. I brought in team members who are phenomenal at underwriting, for example. I am pretty good at underwriting, but I am not extraordinary. Therefore, I brought in experts who have many more years of underwriting experience than what I have. I also brought in great property management, an assistant, and every other team member that I needed in order to run a successful business, while I get to focus solely on sales and marketing.
Once I got my hands dirty, identified what I was really good at, and brought in partners, I was ready to scale my business. As a result, I was able to go from owning three SFR’s to controlling over $400 million worth of real estate in just 4 years. Are you ready to do the same?
COMMENT BELOW: Based on “getting your hands dirty,” hands on experience, what is the one thing that you are REALLY good at? What is the thing/things that you aren’t so good at and need to outsource to other team members?