How to Aim Big on the Very First Multifamily Purchase?
The real estate industry is a big place for those who want to earn more money and invest in properties. But, the question of how many units should you start with is still a question of many. There is no definite figure to answer this but there are factors that you can consider so you can come up with the right number of units when starting your multifamily purchase. If you are curious about it, there are basically 5 major factors that can affect your decision-making: capital, experience, preparedness, partnership, and mindset.
The amount of money you are going to use for the purchase is the most essential consideration you should take. Ask yourself, where are you going to get the money to acquire the property? The challenge when you first invest in real estate is having a lack of funds for a successful purchase. Not all newbies know the types of funding such as bank financing and home mortgage loans. Also, note that the size of the property you can avail will depend on how much capital you are willing to spend.
There are different approaches to earn money in the real estate industry. You can fix and flip wholesale a property, or buy and hold. Your experience is a factor when considering your first multifamily purchase. If you are a new investor, you should take into account getting a real estate course or training that will help you level up your skills. It’s also an option to start small. As you venture more into the world of real estate, you will learn a lot from your experience and you can use your learning to come up with a better decision in the future.
Are you prepared financially, physically, and mentally? When preparing for your first purchase, you need a smart business plan that will outline all the steps you need to take from the moment you acquire the property until you put it in the business. You can also emphasize your current portfolio, experience, and successes in your business plan. If this is not something you are considering, ask yourself again if this is the time for you to buy your first property.
A partnership will help you in a lot of ways when making your purchase. A partner will help you accumulate enough funds for the acquisition, decide the size of the property, how many units are suitable for your business and run the business when it comes live. You can consider this if you think you don’t have enough experience and skills to pull up a good running real estate business.
Last but not least is the mindset. A proper mindset of an investor is needed when buying your property. You have to be firm with your decision. Your mind should be programmed in a way that considers all the options instead of sticking to something that will only stress you out. You need to think big and outside the box.