Scott Jacobson, 20 year veteran real-estate investor, explains what metrics you should be looking to see in a property’s financials if you’re hoping to invest in a multi-family property, as well as advice in working with a syndicate group of investors. Take a listen!
In today’s episode, we delve into what you should look for when investing in multifamily properties with expert insights from Scott Jacobson of Onward Equity. This blog post will summarize the key points from our interview with Scott, providing you with essential knowledge to make informed investment decisions in the multifamily property market.
Understanding Multifamily Property Investment
Who is Scott Jacobson?
Scott Jacobson is a professional investor with Onward Equity, a company dedicated to acquiring and managing multifamily apartment buildings across the United States. His journey into real estate began over 20 years ago, inspired by a mentor who introduced him to the potential of rental properties.
Getting Started in Multifamily Investments
Why Choose Multifamily Over Single-Family?
Investing in multifamily properties differs significantly from single-family homes. While single-family homes can be managed individually, multifamily investments require a collaborative team effort due to their scale and complexity. Multifamily properties also demand higher initial capital, often involving partnerships with investors to secure the necessary funds.
Key Considerations When Investing
1. Location:
- Ensure the property is in a desirable area where tenants feel comfortable and proud to live. A good location is a crucial first step in determining a property’s potential success.
2. Financial Analysis:
- Numbers are critical. As Scott, an accountant by training, emphasizes, understanding the financials is essential. Analyze potential rent, expenses, and the overall financial health of the property to ensure it meets your investment goals.
3. Occupancy Rates:
- Aim for a minimum occupancy rate of 90-95%. High occupancy ensures steady cash flow and reduces the risk of vacancies impacting your income.
4. Property Improvements:
- Look for opportunities to enhance the property. Simple upgrades like new paint, countertops, and fixtures can significantly increase rental value and tenant satisfaction.
Structuring Your Investment
Syndication: A Collaborative Approach
Multifamily investments often involve syndication, where general partners (like Scott) handle property acquisition, management, and improvements, while limited partners (investors) provide the capital. This partnership allows for pooling resources and sharing the returns, making large-scale investments more accessible.
Practical Steps and Advice
1. Start as a Limited Partner:
– For beginners, consider starting as a limited partner. This role allows you to invest capital without managing the property, offering a hands-off way to learn about the market and earn returns.
2. Build a Trustworthy Team:
– Surround yourself with experts who complement your skills. A strong team is vital for managing multifamily properties effectively.
3. Leverage Local Expertise:
– Investing in properties outside your immediate area can be successful if you have reliable local partners or property management companies to handle day-to-day operations.
Resources for Aspiring Investors
Educational Materials:
- “Rich Dad Poor Dad” by Robert Kiyosaki:
- A foundational book recommended by Scott, offering insights into real estate investment and financial independence.
- Onward Equity’s Free Ebook:
- Scott provides an ebook titled “Top 10 Reasons to Be a Passive Real Estate Investor” on his website, onward-equity.com This resource is designed for newcomers, explaining the benefits and basics of passive real estate investing.
Conclusion
Investing in multifamily properties can be a lucrative venture if approached with the right knowledge and resources. By focusing on location, financial analysis, and building a strong team, you can navigate the complexities of this market effectively. Whether you’re looking to start as a limited partner or dive into property management, the multifamily sector offers diverse opportunities for growth and financial success.
For more educational content and resources, visit [Onward Equity’s website](http://onward-equity.com) and subscribe to their newsletter for regular updates on real estate investing.
By following these guidelines and leveraging expert advice, you’re well on your way to making informed, profitable investments in the multifamily property market.
