05 Oct CREPN #60 – Multifamily Investing versus Single Family with Michael Blank
Michael Blank makes the case for Multifamily Investing over Single Family Investing and provides the steps needed to get your first multifamily deal. [x_audio_embed][/x_audio_embed] SUBSCRIBE iTunes Stitcher Michael’s educational training put him in the high flying world of tech startups where he traded time for money. After reading Rich Dad Poor Dad, he realized he wanted to make a change. He first purchased a chain of restaurants, expecting to be able to hire the right people and enjoy passive income. He soon found that as the economy goes so goes the restaurant business. Then he made the decision to get into real estate. Since all of his capital was tied up in his restaurants, how could he get into real estate? He found others with money willing to invest in his plan. In 2009 he recognized that he could purchase a single family property at a significant discount and resell for a handsome profit. He introduced his plan to get into real estate to some acquaintances, and was blown away by how easy it was to get financial commitment. His first commitment was $25,000 from an acquaintance. This was a mind shift. After successfully handling more that 30 flipps, he recognized that the revenue stream only happens when a deal is completed. This helped him turn to move multifamily. Why do multifamily investing instead of single family? Michael teaches and coaches investors looking to get into multifamily investing. We discuss some of the challenges students regularly face When comparing real estate investment strategy, Multifamily versus Single Family, the following are six points for consideration for an investor looking to grow to 25 doors showing which is better for each: Multifamily Property Management + Control over value + Ability to sell (25 doors) + Ability to scale + Single family Affordability + Finding Deals + The importance of Mindset The following myths & reasons tend to be why people don’t get into multifamily. I don’t have
- the money.
- any experience.
- the time.
How do you raise the money?It’s an acquired skill. Michael’s personal experience showed him that there are a lot of people with money looking for a positive return, but not able to find someone or something they trust. By networking, he was able to describe what he was doing, and mention if the knew anyone who might be interested.
How do you overcome the lack of experience?The sample deal package is an exercise Michael teaches his students. It provides all of the necessary steps to take when an actual deal comes along. The student gets the opportunity to put a deal packet together and something to talk with potential investors about.
Where to start?Michael takes his students on a path of action. In the first 90 days, he helps them identify daily activities to provide them the foundation of education needed to intelligently network with potential investors and professionals. The first 30 days students learn how to:
- Find deals
- Speak the lingo
- Analyze the deal
- Determine where they want to invest using statistics & reports to support their decision.
- Meet with potential investors
- Analyze deals & submit informal offers asking how flexible is the seller.
- Build your team starting with the Property Manager