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Multi-family real estate investing is something that has always fascinated me.
It's one thing to buy a rental house and see a few hundred dollars of passive cash flow trickle in each month… but when you can multiply those numbers hundreds of times over, you start seeing some remarkable results.
For many people, some pretty big perceived obstacles are standing in the way of success in this kind of business.
Most of us can get comfortable with a smaller-scale operation like a duplex or fourplex. Saving up the funds needed for a down payment on a smaller property and figuring out how to manage it is something the average person can figure out easily enough… but how does ANYBODY get the capital to buy a million-dollar property, a ten-million-dollar property, or even a hundred million dollar property? How can the average person pull off such a massive financial feat (not to mention finding a good deal and figuring out how to manage such a big operation)?
It is possible, and I want to tell you about two guys who can help show you the ropes…
Introducing Jake and Gino
This past year, I was introduced to two rising stars in online education for multi-family real estate investing. Their names were Jake Stenziano and Gino Barbaro, and they were kind enough to invite me onto their podcast back in January of 2016.
As I got to know them, I listened in on some of their earlier podcast episodes and was impressed to hear the kind of wisdom and experience they shared with their listeners.
As someone who had worked in commercial real estate banking for almost a decade, the things they were saying resonated with me – because I knew their advice was coming from first-hand experience, and it was spot-on.
When I realized they had a course that covered all the details on how they built their business, I had to get a closer look. They were kind enough to give me free access for a limited time so I could review it and learn everything I could – and if YOU are someone who wants to learn more about this investing niche, my hope is that this brief overview will give you a better idea for what their course has to offer.
If you want to check out the Wheelbarrow Profits / Multi-Family Mastery Program, you can see more information through this affiliate link.
As a quick recap – the course is centered around three big pillars – Buy Right, Manage Right and Finance Right.
This first section covers a TON of important things when it comes to the acquisition process. Things like:
- All the key players you'll need to get on your team and where/how to find them (brokers, accountant, lawyers, title companies, insurance brokers, mortgage brokers, management companies, etc).
- How to look for, and identify prime deals on “Mom and Pop” apartments (which has less to do with the size, and more to do with the type of seller).
- How to select a market to invest in (where to look and why, how to manage your first few deals, the important role of things like job growth, the economy, property taxes, property insurance, replacement value and more).
- How to speak the language and understand the terminology that brokers, bankers, and investors use in this line of business (and most importantly, how it lends you credibility in the marketplace).
- How to look for and identify motivated sellers (i.e. – “Mom and Pop” owners). This lesson is loaded with important insights that will help guide you to the property owners you should be doing business with.
- What to avoid and which types of properties and property owners to stay away from. In this tutorial, the guys share a ton of education that they've learned (sometimes painfully) through their years in the business.
- An overview of the entire acquisition process, including the letter of intent, purchase agreement, and the formation of your business entity.
- How to negotiate effectively, including some key issues to navigate through the negotiation process, and some role-playing and examples of how to handle common conversations.
- Due Diligence. What to look at, what kinds of red flags to watch out for, and how to get the deal under wraps without making any notable mistakes.
- How to take over the property during and after the acquisition is complete (including a takeover checklist and tenant takeover letter).
This second section is another vital component to running a sustainable business. In this area of the course, they cover a ton of important lessons and considerations, including:
- Whether or not you should manage your own properties, and the implications of this decision (regardless of which way you go).
- Red flags and warning signs to watch for if/when you decide to use a property management company (because they're NOT all created equal).
- How to look closer at the management issue to find hidden value in different investment opportunities.
- A detailed, step-by-step system to manage properties effectively and extract the most value from the hidden opportunities to improve each property.
- Understanding how to fill vacant units, and what you can expect to generate from each one.
- How to implement “RUBS” and increase rent while increasing value (a very powerful technique).
- What things are (and aren't) worth fixing and improving in each property.
The financing strategy for a business like this is extremely important. In this section, Jake and Gino explain the specifics of how to get the right kinds of loans, with the right terms in place, so your portfolio can experience healthy growth over the long term.
- What kinds of loans to start with, when to refinance and how to refinance.
- How to talk to lenders, which types of lenders to pursue, what bankers expect to see, how to speak with credibility and provide the information that will get you the proper approvals.
- An understanding of some of the key terminology that lenders will be looking at, what they mean, and how to help them see what they're looking for.
- Where to find the money when you're getting started.
- The ideal terms that Jake and Gino are shooting for on every deal (regardless of the lender), including the interest rate, amortization, down payment, cash on cash return and more.
- The important role of “bridge financing”, where to find it, and how it plays into the long-term strategy.
- How to move from bridge financing to long-term “preferred financing”, so your business can grow, along with your capacity to pursue new deals.
- The pros and cons that come with the different terms offered by different types of lenders.
I can say from personal experience, the financing aspect of this type of business is a HUGE component. As a former commercial banker, I know this is an area where many people get confused, and the confusion (and inability to get the financing needed) can kill off the dream for a lot of would-be investors.
I thought the advice they shared in this section was worth the price of membership all by itself. When you're armed with this knowledge, you will have a MUCH higher likelihood of getting through this obstacle-ridden area.
In addition to the massive library of content in the Wheelbarrow Profits / Multi-Family Mastery course, members of this group also have access to a great Facebook group, where the guys are actively helping out and answering questions that come up from their members. I was able to take a closer look while I was giving their course a try and I saw a lot of great conversations happening there.
Jake and Gino also offer periodic webinars that are available to members only, and they're a great way to soak up new insights and immerse yourself even deeper into the business.
They also have a great YouTube Channel, Podcast, and Blog where they cover all kinds of issues on a regular basis. If you're looking for some helpful (and free) information, these are some other great things to check out.
All in all, I was pretty impressed with the course content. Short of finding a personal mentor to help with my first apartment building purchase (which would easily cost thousands), this is the closest thing I've seen to having an actual mentor walking me through the full investment process.
I've been investing in smaller rental properties for several years now, and while my experience is on a much smaller scale than Jake and Gino's business – what I saw from their course seems very accurate and in line with what I've experienced in this investing niche. Their advice all came across as very realistic. It all made sense and didn't cause me to scratch my head or get confused.
It's clear that Jake and Gino have a TON of relevant experience and they are very good at explaining what to do in order to get into this business. If you're serious about investing in multi-family rental properties, this is a great place to get started.
As I mentioned in the video above, these are some of the biggest benefits with the package:
- They are very involved and personally respond to questions (big plus).
- There are bi-weekly calls with Jake and Gino, along with a library of every recorded call.
- Great real-world advice on how to deal with brokers, financiers, sellers.
- Great tips on how to handle various issues that come up in the negotiation process.
- Helpful acknowledgments of the hardest parts of the business, and how to get through them.
- Excellent explanation as to WHY multi-family real estate makes so much sense (tax advantages, passive/portfolio income, depreciation, “forced appreciation”, economies of scale, increased negotiation power, hedge against inflation as economies improve, leverage through OPM (controlling 100% of an asset, and only putting down a small portion of the overall value), loan payoffs from tenants, etc.)
- Awesome overview of the “velocity of money” and why it's so powerful.
Again, if you want to learn more from these guys, it's not expensive to do so. For $97/mo, you can enroll in their course and get access to everything they have to offer. Be sure to check it out here if you're interested!
If you decide to give their course a shot – be sure to re-visit blog post and let the REtipster community know what your experience was like!