Our first rental property was a single family home in Austin, TX purchased by Efren, at 26, in 2012. Later, we got married, and acquired 10 more single family homes and put together a business plan with goals to quit our jobs and use our time how we wanted to. Then, we started to learn more about multifamily investments. We invested in some apartment complexes and now have more than 1200+ rental units all across San Antonio, Austin, and Houston, TX. This allows us to live where we want, pay all our bills, giveback, and work far fewer hours than most.
That’s the power of multifamily real estate.
Learning how to invest in real estate can change your life, whether you’re looking to invest passively in a few deals or build a full real estate empire. It’s similar to investing in single-family houses, but instead of buying one home at a time, you’re able to buy in bulk with a single lender and a few more components. With buying in bulk, you can scale up your passive income and net worth faster than any single-family path. And, it’s way more fun!
What they say is true – multifamily properties are by far, the easiest way to build wealth in real estate.
And the great thing is that anyone can invest in multifamily, regardless of where you live, income, credit, experience, or bank account – IF you have the right knowledge.
Benefits of Multifamily
We love multifamily for many reasons. Here are some of the main reasons why we made the transition from our single family goals over to the multifamily space.
Cashflow
Although the single family BRRRR strategy has proven its abilities to provide our family with some cash flow throughout the years, multifamily properties have accelerated our timelines to be able to leave our W2 jobs and fund our lifestyles comfortably. We learned that wealth is not built by purchasing a property, but by building a portfolio.
We also learned that a single home purchase each year is a slow path towards generating enough cash flow to actually quit our jobs. Life is too short to wait 30 years to have the financial freedom to allocate time towards family vacations, buying your dream car, or whatever your goal is.
Scalability
In the single family space, we were always limited to buying one home at a time. Identifying a great deal was getting difficult and with so much competition (especially in a hot market), profits for the efforts applied were less worthwhile. And without established relationships, general contractors were also too busy to prioritize on any client, which led to extended timelines and/or other issues related to finding referrals for new contractors. Another challenge was the continuous maintenance calls that we would have to take on as landlords. To successfully find, purchase, renovate, refinance, and rent out one rental home, it would take us anywhere from 6-12 months or even longer based on other factors. Ultimately, this business plan was unreliable and had too many single points of failure where our projects rarely met projected deadlines.
With multifamily properties, we’re able to invest and acquire 100+ units in one lending transaction with the ability to include all the necessary teams for property management and full-time maintenance in the loan. This can happen within a few months and usually, these properties are already cash flowing with a high occupancy rate. With this timeframe, you have the ability to own hundreds to thousands of units within a single year.
Reduced risk
Another aspect of owning single family homes is the increased financial risk you take on as a landlord. When someone moves out at the end of their lease, it’s 100% vacant and you’re left personally responsible to carry that mortgage payment until someone moves in. That timeline can be increased in cases where you’ll need to repair, patch, renovate, or if you’re unable to find a renter immediately. But if you own multifamily properties, when one unit is vacant, you have all the other units to carry the weight until you find the next tenant. That makes a multifamily property a very powerful asset, especially for a beginning investor.
With that being said, there is a different skill set to be applied going into multifamily so it isn’t as easy as buying another single family home. One of the easiest ways to get started in this space (successfully) is by passively investing in a deal and by joining a program that provides you with the knowledge and ecosystem to get onto your first deal. At that point, you’ll be on your way to producing enough cash flow and creating wealth!
Have Questions? Contact us to learn more!