It is said that the First Multifamily Deal is the hardest. For Jason & Pili Yarusi, they realized that there are efficiencies in multifamily are greater than what you can get with smaller properties.
Once they decided to move forward with multifamily, the question turned to where?
Jason & Pili are residents of New Jersey, where real estate prices are prohibitive for investing due to compressed cap rates and tenant laws do not favor landlords.
First, they set their Multifamily investing criteria:
- Number of units, more than 100 and less than 200
- Market Population stability or growth
- Stable employment
- Areas they were familiar with
The markets they found to support their criteria:
- San Antonio
- North Carolina
Then they built their multifamily team.
The first member of the team in was property management firm. The criteria for selecting a property management firm:
- Not too small
- Real time software that provided access for their investors
- Ability to provide onsite management and maintenance
- Extensive market knowledge
How did you find the property?
Their property manager led them to a property that had been on the market previously. They believed it had some value add potential. They analyzed the deal, and made an offer. The seller countered, but quickly they realized they were too far apart.
After six months of a continued search, they circled back, and made a second offer to the seller. This time, they provided numbers to back up their offer and explained the reasons for their offer. The seller came down $600,000 and requested that the buyers pay their brokers commission.
After analyzing hundreds of deals, making multiple offers, and always being disciplined, their efforts paid off.
For more go to:
Podcast: The REI Foundation Podcast with Jason and Pili