Is multi-family investing right for you?

We get the question a lot, “Is multifamily real estate for me?” Even more we hear, “I want to start investing in real estate what should I do?” There are no right answers to these questions, simply more questions that only you can answer. The truth is no one can tell another person what fits them best or provide a perfect plan for success. The most successful owners of multi-family properties made up their minds they were going to start investing and just did it. You have to look yourself in the mirror and answer a few questions for yourself.

1. Am I financially ready to start investing? This is a question with several levels. First, do I have enough money saved for a down payment? Do I know what down payment requirements are? Do I have enough reserves saved if I make a mistake or something goes wrong? If you can’t survive a “worst case scenario” plan without starving, you are not ready.

2. Am I ready to work? TV shows, books and seminars have glamorized what is truly hard work. You will not get-rich-quick buying multifamily properties and it will not be easy. You need to be prepared to manage the property, make repairs, deal with tenants and more. Property owner is just another title for “problem solver.” Maybe you are going to hire a manager. Well guess what, that costs more money and that doesn’t mean they are going to be perfect. Even a management company needs direction and oversight.

3. Am I determined I will succeed? Investing in real estate will require a leap of faith in your own abilities. Those who are determined to succeed, confident in the decisions they make and willing to find their own way will have a much higher rate of success than others. Don’t be scared to make a mistake. If you don’t make a mistake you are not trying. Real estate is very forgiving if you are a long-term investor. Time can heal almost anything as long as you keep pushing forward.

If you answer all these questions honestly you will know if real estate investing is a good fit for you and your lifestyle. Assuming you decide to move forward it just comes down to perseverance. Start researching your market to understand rents, prices, financing options, growth patterns, employment trends, etc. Drive by properties and neighborhoods to figure out what you like and don’t like. Then have the guts to develop a plan and execute.