There are four foundational gates that you will need to get through to help you successfully find, fund, fix, and flip multifamily properties—our four-step process. These gates are knowledge, deal flow, experience, and capital. If you can get through these, then you will be on your way to closing deals.
Knowledge
There is a reason that I put knowledge first in this list, as it isn’t enough to just have the capital or experience to close in on deals. It is key to have an idea of what you’re doing, especially if you intend to be more involved via joint venture in your investments.
There are lots of educators out there—we have our 11-week course that offers investors everything they need to know to secure deals and operate them. It’s not a one-size-fits-all—it offers different helps to fit your chosen strategy. We’re big on joint venture. There is a ton of information out there that you can listen to through podcasts or YouTube, or by reading literature. These can be helpful, but you have to keep in mind that all this information is disjointed, and you may feel like you have all these pieces but no box.
That’s why we recommend a cohesive course, attendance at online conferences, and getting involved with online communities that have similar goals as you do. This will give you a better and fuller framework to work from.
Then it is time to apply the knowledge you have gained against the leads that you find.
Deal Flow
You can’t make a deal and gain experience if you don’t have leads to work with. You can find leads by taking time to market yourself to brokers. Although this is not the most reliable way, brokers are useful people to make relationships with for the long term. Some other ways are to look at online listings, make phone calls to owners, and take advantage of direct mail campaigns.
Experience
Especially when starting out, this can be a tough hurdle in getting people to work with you and to receive funding. The best way to get experience is to first join up with another operator who already has experience. You can learn from their experience until you get to a point where you can show that you can close deals. They can help you get the necessary funding, and in return, you can bring your knowledge and deals to the table.
Capital
There’s a reason that I placed capital last. A lot of people might think that capital is the most important piece, but remember that you can have the money and not have the foundational knowledge, leads, experience, or partners that will ultimately enable you to be successful in closing a deal. And if you do have the money, then you certainly want to make sure that you don’t waste it by buying a bad deal.
In summary, these are the four components that everybody, no matter where they are in their investing career, are trying to procure. If you don’t have these things, you won’t be able to get deals done. If you do have them, you’re on your way to successful deals. Everyone is always looking to get more knowledge, deal flow, experience, and capital, which will lead to more. And to be clear, I do believe that investors do need to follow the order of knowledge, deal flow, experience, and capital. It won’t work to throw money at a deal without the experience to pull it off, and you can’t get experience if you don’t have a deal. But even more fundamental than that, you won’t know if you have a deal if you don’t have the foundational knowledge to help you vet prospects. From an investment standpoint, we want to help people protect their capital and make sure that they can make successful investments.
Once you acquire these four components, you can use them to follow our four-step process, which is to find, fund, fix, and flip properties. This process helps you find deals, then figure out how to get them funded by creating a business plan and putting together a team. You can “fix” the deal by executing the business plan, and then flip, which could mean lots of end goals including refinancing or harvesting the equity. The process isn’t easy, but with the foundational keys of knowledge, deal flow, experience, and capital, you can invest successfully in multifamily real estate.
As a thought leader in the multifamily investing space and founder of The Myers Development Group, I have used my broad experience in real estate investing to create Myers Methods. This multifamily investing course teaches you how to find the best real estate deals and own and operate highlight lucrative multifamily properties.