Let me introduce you to the Myers Method of investing—a better way to achieve your goals to invest successfully in multifamily property. This method teaches you how to successfully buy a business attached to real estate, improve its operations, use it as collateral to get financing, and then get rewarded for your contribution to the deal. Let’s get started, and I’ll show you how to Find It, Fund It, Fix It, and Flip It.
Find It:
The Find It phase begins with putting out your nets to find leads and ends with when you have a signed purchase sale agreement or a contract for sale.
You start putting out your nets to search for a property that will eventually lead you to find a lead. This is called a lead and not a deal for a reason, as finding a lead does not equate to a done deal. You can learn more about finding leads here.
Once you have a lead, you can analyze the lead. You can do this by touring the property and meeting with the broker or owner of the property. Once you’re done touring and have a good feel for the property, you can then reanalyze by creating a model of the deal.
If it is a deal, then you can create and send your letter of intent to purchase (LOI) stating your terms, and if all is in order between buyer and seller, then you will go to contract and establish a purchase sale agreement. Then you move on to funding your project.
Fund It:
This part of the process begins with the contract and ends with finalizing your business plan and getting the funds in order to execute the business plan.
Once you have a deal and a contract, then you can select your strategy to begin taking on the deal. You develop a preliminary business plan. In your business plan, there is an executive summary, which gives an overview of the property or the opportunity. Through this, you describe your plans for how you will improve the property’s performance and briefly shed some light on the financial side of the deal. It will also offer an overview of the projected financial returns and ask potential investors to reach out if they have questions about your business plan.
One of the most important parts of developing the business plan is selecting your team. These are the people who will help you carve out the best plan and will be there at every step to make sure that it is executed as successfully as possible. Choose people that you trust and that have similar aims and values as you.
Next, you’ll take your deal and business plan to a bank for underwriting. Remember that it is always good to have people looking over your shoulder and that the bank will likely be your biggest investor. They don’t invest in dreams, so you will need to present a solid business plan. This is also where it is important to have a reliable team with experience. You have to be able to present a contingency plan and demonstrate your capacity to keep the project on track if things go off the rails. The bank is walking a tightrope. They are motivated to loan you money so that they can make money, but they want to do it with as few risks as possible. Do all you can to show how your deal will be profitable and risk-free.
Then it is time to carefully inspect the property. You want to have a solid understanding of what condition the property is in, and how much you will need to fix it so that you can get the appropriate funding. Get an inspector, and then go through the list of everything documented by the inspector to figure how much it will cost to fix. Once you negotiate with the seller, you can adjust your model accordingly to include estimated repairs. After this, you will also need to figure out a model that will include the closing costs of the deal.
Once you have reanalyzed and confirmed your numbers, you can present an executive summary as the final step towards filling your funding gaps and negotiating concessions. Once this process ends and you are clear to close, you’ll be looking at the biggest check of the entire process if your assumptions were correct. Then you will be ready to begin executing your business plan.
Need more multifamily investing advice? Check out my Myers Methods multifamily real estate course, which teaches you how to find and develop the best real estate deals and helps you master apartment investing as the surest way to powerful passive income.