How I Raised 1 Million Dollars for My First Multifamily Deal

Are you an aspiring apartment syndicator looking to raise equity for your first multifamily deal? I know how daunting it can be to secure equity for your first deal especially when you, and the potential investors, know you just don’t have the track record, yet. However, with the right approach and strategies, it is possible to raise the necessary funds to get your first multifamily deal closed.

In this article, I will share my experience on how I managed to raise 1 million dollars for my first deal.

Here are some tips that could help you too:

1. Leverage The Track Record Of A Mentor

When approaching potential investors, it can be helpful to leverage the track record of a mentor. If you have a mentor who has successfully completed similar deals, you can point to their success as evidence of your own potential. You could also consider partnering with a more experienced investor who can provide guidance throughout the process. This is exactly what I did in the beginning by having a mentor, who at the time had about $100MM Asset Under Management (AUM).

2. Create A Big Company Aura

At first glance, the sentence above may leave you feeling confused and unsure. I agree that it is not immediately clear. However, I will never forget what my father-in-law said when he saw the newly launched Dwellynn website. He exclaimed, "Wow, this looks like a big company!" This initial impression is crucial. Potential partners, investors, and lenders who visit your site for the first time should feel the same way. It is important to pay attention to every detail. Perception is reality, so make sure to appear big from the get-go. And when reaching out to stakeholders, avoid using an email address with "@gmail.com" at the end.

More to come about this in the Apps and Software we use at Dwellynn module.

3. Build a Strong Network

Now that you have created a “big company” aura, it is time to go out with confidence into the world. Networking is crucial when it comes to finding equity for your first multifamily deal. You need to build a strong network of passive investors, mentors, and partners who can help you fund your next deal. Attend real estate conferences, events, join business associations, and participate in online forums such as BiggerPockets, LinkedIn or even Instagram to expand your network.

Personally, this is where I was able to find my partners who were out-of-state but needed a boots on the ground partner in Texas and someone who can find good assets, control the deal, and take it to closing. This is how I did it.

In conclusion, raising equity for your first deal can be challenging, but not impossible. By adding your mentor’s track record to your team’s section on your website, creating a professional look for potential stakeholders, and continually building a strong network.

That classic, though corny, line of Your Network is your Net Worth is true!

Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.

How to Find a Property Management Company for Your Real Estate Investing Team

Real estate investing can be a lucrative business, but managing properties can be a hassle. That's why many investors hire a property management company to help them with the day-to-day operations of their rental properties. However, finding the right company can be a daunting task. Here are two ways to find a property management company for your real estate investing team.

Referrals from Other Investors

One of the best ways to find a property management company is to ask for referrals from other investors. Real estate investing is a tight-knit community, and many investors are more than happy to share their experience with property management companies. Reach out to local real estate investment clubs or associations and ask for recommendations. You can also ask for referrals from real estate agents or brokers who specialize in investment properties.

When asking for a referral, be sure to ask about the company's experience, their fees, and their communication style. It's also a good idea to ask for references from current or past clients. Once you have a few referrals, do your due diligence and research the companies further. Check their reviews online and ask for a copy of their contract to review.

Online Directories

Another way to find a property management company is to use online directories. There are several directories available that specialize in connecting investors with property management companies. These directories allow you to search for companies based on location, services offered, and fees.

Some popular directories include All Property Management, Buildium, and Cozy. These directories typically have a vetting process for the companies listed, so you can be assured that the companies you find are reputable. However, it's still important to do your own research and read reviews before making a final decision.

Conclusion

Finding the right property management company for your real estate investing team can take some time and effort. However, by asking for referrals from other investors and using online directories, you can narrow down your options and find a company that fits your needs. Remember to do your research and ask the right questions before making a final decision. With the right property management team in place, you can focus on growing your real estate portfolio and increasing your profits.

5 Signs That You Should Walk Away From a Property Deal

Real estate investing can be a lucrative business, but it's not without its challenges. One of the biggest challenges is knowing when to walk away from a property deal. It's important to recognize the signs that a deal may not be worth pursuing before investing your time and money. Here are five signs that you should walk away from a property deal.

1. The Property Has Serious Issues

If the property you're considering has serious issues like structural damage, mold, or a faulty foundation, it's best to walk away. These issues can be costly to repair and may make the property difficult to sell in the future. Unless you're prepared to take on a major renovation project, it's best to look for a property that's in better condition.

2. The Numbers Don't Add Up

Before investing in a property, it's important to crunch the numbers and make sure the deal makes financial sense. If the numbers don't add up, it's best to walk away. This could mean that the property is overpriced, the repairs are more expensive than anticipated, or the rental income won't cover the expenses. It's important to be realistic about the potential profit and make sure the deal is worth your investment.

3. The Seller Isn't Cooperative

If the seller isn't willing to provide the information you need, won't allow you to inspect the property, or is unresponsive, it's best to walk away. A lack of cooperation from the seller can be a red flag and may indicate that they're hiding something or aren't serious about selling the property. It's important to work with a seller who is transparent and willing to work with you.

4. The Property Is In a Bad Location

Location is key when it comes to real estate investing. If the property is in a bad location, it may be difficult to find tenants or sell the property in the future. Factors like high crime rates, poor school districts, and a lack of amenities can all make a property less desirable. It's important to consider the location carefully before investing in a property.

5. You Have a Bad Feeling About the Deal

Sometimes, your intuition can be a powerful tool in real estate investing. If you have a bad feeling about a deal, it's best to trust your instincts and walk away. This could be a sign that the deal is too good to be true, the seller isn't trustworthy, or there are hidden issues with the property. It's always better to err on the side of caution and avoid a deal that doesn't feel right.

Conclusion

Walking away from a property deal can be difficult, especially if you've invested time and money into the process. However, it's important to recognize the signs that a deal may not be worth pursuing and to trust your instincts. By avoiding bad deals, you can save yourself time, money, and headaches in the long run.

3 Ways to Raise $1,000,000 for Your First Apartment Syndication

If you're interested in raising money for real estate investment opportunities, it's important to understand why people invest passively. Don't worry, we've got you covered!

Before starting the process of raising over 1,000,000 for an apartment syndication deal, I thought people would invest in my deal primarily for the returns, whether cash-on-cash returns, internal rate of return, equity multiple, or simply an annual amount. Silly me! While returns are necessary, they're not the most important factor. People invest based on trust. They trust you as a person and as a businessperson. They trust you with their money because they know you or people who know you and can vouch for you.

If you want to successfully raise real estate investment capital, you need to gain potential investors' trust. Here are three ways to get started:

1. Time

Establishing a relationship with investors takes time, but don't worry, you got this! For your first syndicated deal, your investors will most likely have known you for at least a couple of years. You don't yet have a track record. Once you establish one, it will be easier to get strangers to invest with you because of your proven track record.

The more expertise you have (see way #2 below), the less time you'll need to establish relationships with those who provide real estate investment capital.

2. Expertise

The more expertise you can demonstrate, the easier it is to raise money. BUT, WAIT. There's a catch.

You must demonstrate your expertise in a way your potential investor understands. Your knowledge is irrelevant. What's important is what's relevant to your investors and how you communicate it to them.

A doctor needs information communicated differently than an engineer, a small business owner, or someone who has invested in real estate before. Your success lies in recognizing how to communicate the information to each audience based on their background and needs.

You can display expertise even if you haven't done the specific thing you're raising money for. Another way to build credibility as an expert (and gain more real estate investment capital) is to create a thought leadership platform. For example, Kathy Fettke leveraged her thought leadership platform, a podcast, to raise $5 million in one week! Other platforms besides a podcast can be a blog, a YouTube channel, a newsletter, an ebook, or a meetup, but there are numerous other ways to become a thought leader. Be creative and find something that complements your strengths, unique abilities, and of course, that you like to do!

3. Personal Connection

The idea that people only invest with their analytical mind is false. We invest with emotion. We go in with preconceived notions and tend to look for things that confirm those notions.

Try this exercise: look around your room and, for the next 30 seconds, find everything that's red. Look red. Find red. Look red. Find red.

Now, write down all the things you saw in the room that are blue.

While looking for red, you probably noticed things that were reddish-brown or orange-ish red but counted them as red. We don't find things we're not looking for.

The point is we find what we seek. Those who provide real estate investment capital do the same thing. If they have a preconceived notion about you and the investment, they'll look for ways to confirm it. So, it's important to establish a solid personal connection with them.

You can do this by finding out what they care about and seeing if you can align with that in a genuine way. If you don't know what they care about, ask them this magic question:

"What's been the highlight of your week (or weekend)?"

That will uncover some things that are top-of-mind for them. They might say "making a business transaction," which will tell you that it's important to focus on the numbers and profitability. Or, they might say, "finally being able to get away with my family," which will indicate that time is precious, and you should emphasize the "passive investment angle" with them.

Isn't Real Estate Investing Risky

I recently went out to eat with an old friend and was asked about my job. I shared that I work as a real estate investor, where I raise capital from investors to buy apartments. My friend asked if it was risky, and I agreed that it can be a lot of responsibility and carry some risk. However, upon reflection, I realized that I had not fully answered the question.

When it comes to risk, it's natural to focus on the potential negatives. But it's important to also consider the potential benefits and opportunities that may arise. In fact, taking risks can lead to great rewards and positive outcomes.

In my daily decision-making process, I weigh the pros and cons of each option and assess the potential outcomes. For instance, when deciding whether to indulge in a Snickers bar, I consider the fact that it's unhealthy but also that it tastes good and is free.

Similarly, when considering whether to pursue a business venture that involves raising funding from investors to purchase apartments, I evaluate the potential risks and rewards. While there is always a chance of failure, there are also great opportunities to provide investors with a conservative opportunity to earn more money, establish strong relationships with investors and team members, educate others about the real estate investment process, and have more time with my family. To mitigate risks, I ensure that I am surrounded by an experienced team and continue my education in the field.

When asked about the risks involved in my job, I emphasize that there is always a degree of risk, but there is also the potential for significant rewards.