“Can I start investing in real estate with multifamily, or should I start with single family homes?”
This is a great question and it seems like there is a lot of confusion out there on exactly how to get started investing in multifamily properties. Or more appropriately, what is the best way to get started. I’ll try to give you my answer here, along with 3 tips to get you going.
First. You do not need to start with single family homes before you invest in multifamily, or apartment buildings. Many investors falsely believe they should start out with single family homes, and after they have accumulated, say 10 houses, they can move up to multifamily. This is not true.
While you can get started with single family homes, there are many reasons why you might want to begin with multifamily properties in the first place. I’ll get into these later.
Second. If you feel more comfortable starting with single family homes first, that is fine. Every investor has different goals and criteria for what they want to achieve. If starting out with single family homes suits you better, that is just fine. Again, we will look at the advantages of multifamily in a moment, but as they say, “to thine own self be true.” In other words, do what works best for you.
Multifamily Investing – 3 Tips to Get Started
OK Great – here are 3 tips to get started investing in multifamily properties:
- Start with some education. Investing in multifamily properties is like anything else new – you must first start with some of the basics, and then build from there. Invest in some courses and even a live event where you can learn more about investing in multifamily. There you will learn how to analyze properties, what to look for, management best practices, and so forth. These will all be valuable tools later on.
- Learn your market and do some property analysis for a while. Learn what the current CAP Rates are in your area. Watch what comes onto the market, how fast it sells, and what does and doesn’t sell quickly. Identify your target area to invest in – hopefully within easy driving distance. Investing close to home on the first property is a very good idea unless you are investing with partners or in a group investment.
- Take action. Buy a property after you have gone through your education and market analysis stages. The biggest thing I see holding people back is the ability to push past their initial jitters and buy a property. The big thing is that no single property will make you a bazillionaire. You must invest a little bit into multiple properties over time for things to grow. So once you take action, keep taking action. And keep learning because that is an ongoing process.