I can honestly write about this topic for a long time. The stories, I have a plenty. When I first started in Multi Family investing, I was the one man show. I sourced my own deals, property managed, financed, managed the contractors, heck I paint an entire building at one point. The lessons have been a plenty, and its tough to say that it hasn’t made me a better multi family investor.
Today, all of my properties are property managed. I have turned into an asset manager. The advice that I can provide those investors that want to actively own multi family properties, while still holding a full-time job is first-hand. I would start by doing a self audit. Ask yourself, why do want to do it and what are you good at. This will lay the foundation for you to be motivated and it will provide you with an honest assessment of your skills. Sure, you can self manage a 4 plex without experience, but if you want to be financially free, you will need many more units.
1. A Smarter Investor: You will need to become a learning sponge. Start with a self assessment. This will help guide you to what topics you should pursue more in detail to develop. To become a smarter investor, you will need to read/listen to books, follow podcasts, build your network, find mentors, become financially literate. Your goal here is to understand all of the components of finding, underwriting, financing, managing, renovating and selling the assets. Be honest with yourself on how much work you want to put in, so that you set the expectation of time.
2. Efficient Investor: I love the movie “the pursuit of happyness”. There is a great quote in the movie. “I had to do in 6 hours, what others did in 9”. As an active investor, with a full-time job, you have to create time. It sounds silly, but in practice its actually not silly at all. If you think about how much time we waste in procrastinating, obsessing about perfect, overwriting emails, planning meetings that should take half the time, you will find time. Also look for the people that take time from you. I’ve learned to avoid these time stealers or keep their interactions to a minimum. An efficient investor is built for speed. They eliminates tasks take away from the goals. Automate, as much as possible, and organize everything. Don’t let paper manage you. I’ve also found that understanding how decisions are made can be a great time saver. Know what is important/urgent, versus not important/not urgent to dictate your time spent.
3. A Disciplined Investor: My advice to active investors is hire a property manager for the day/day operations. This will help you scale. Don’t get fixed on the small percentage that you have to pay a manager; it will be worth it. Allow them to manage and you can manage the capital budget. You will get more out of that task. The disciplined investor sets controls for the entire project. Everyone on your team knows thier role. If you manage the property, then your tenants knows when/not to call you. They understand the rules of living at your property. This will make managing of the property much easier. Residents will know where they can’t push the limits, and ensure you enforce the rules. Create separations from your daily life and the properties, so you don’t burn out. You can do this by automating, as much as possible, and having specific communication modes for the property. You can use 3rd party software to manage payments, including maintenance requests. Its like having a manager, but not the higher cost. Also, under no circumstances should you be the handyman.
I will probably decide to tackle these in much more detail in future blogs. For now, if you desire to be an active investor, while holding a full-time job, its possible. For those that don’t want to tackle this large task, fortunately we have syndications investments that take all of this work out for those investors.
Contact me and Lets talk more.