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Are you looking to buy a multi-family asset in the next three years?
Number one, only buy a property that is not vacant as your first investment. Why do I recommend buying a property that’s not vacant? Because you’re gonna need some cash flow when you first get started. You’re going to need an opportunity that has some sort of income so you’re not starting out, trying to make something work.
Number two, do your due diligence. When you’re buying that asset, that again, that asset that has tenants in it already, you want to understand what the experience is of those tenants within the property. Yes, you’re going to get the rent roll, you’re going to get all the documentation from ownership that discloses what you need to know about that asset, however, take some time to Google, look at Openigloo, and see what tenants are talking about what are the complaints, whether it is that there are violations in the properties and things like that. You want to be aware of the challenges of the asset that may have not been completely documented.
Number three, assess how much income you are willing to lose —not willing to invest— willing to lose. Every investment is going to have your own paper requirements. Obviously that’ll be what you’re going to need to acquire the asset but there are going to be other costs that are really just not going to already be in front of you. How much are you going to have to pay to potentially evict a tenant once you get into an asset and they stop paying? How much are you going to have to pay to rehab the hallways, the elevators, the roof, the boiler?
All these different things are going to play into your experience as an owner. If you’re not comfortable taking those risks, take a step back and reconsider investing in real estate.