Everybody has to start somewhere when it comes to investments, and it’s no different when it comes to investing in multifamily units. Education, securing funding, and building solid partnerships and relationships are the corner stones to successful investing. The first deal can be challenging or scary, but it is so important to take that first step and just jump in.
Reed Goossens went from immigrant to very successful investor with over 2,200 units to his name. He grew up in Australia with a background in engineering, not knowing anything about real estate. Reed came here with no extra money and no real estate investing experience. He spent two and a half years educating himself in all things real estate. He read the books and took the courses to learn all that he could.
He wanted to do more and be more. He loved engineering but wanted to be his own boss. Ultimately, he realized he was sitting on the sidelines of his own life. Without action he was never going to get anywhere. He decided to jump in with his first deal, even though he wasn’t sure he was ready. Taking steps to close on that first deal gave him the confidence and means to pursue more and more properties, and he now owns 2,200 properties and has a 250 million dollar portfolio. Huge success starts with that first step.
REED’S SIX PS RULE
Reed has six main pillars, the Six Ps Rule, that he follows to continue to build himself as a successful investor. He learned these over the last eight years of buying and managing multifamily properties.
The Six Ps Rule:
- Professionalism-Professionalism is permission you give yourself that you have enough credibility to go out and start earning capital. Even if you are new to real estate investing, use the skill sets you do have to prove that you are good enough for investors to invest in you. Be professional in everything you do.
- Pitch-There are three types of pitches: social, scheduled, and sales pitches. A good pitch should have people saying, “that was a good conversation.” Your potential investors or clients should be intrigued by what you have to say and want to find out more. Get out there and pitch a lot to get really good at it.
- Practice-Once you put your pitch out there, go from a social setting into a scheduled setting. Polish up and use your more professional pitch.
- Platform-You need a platform where you can go and share with everyone what you do. Examples of effective platforms are blogs, podcasts, and social media. Your platform is where you can leverage your message and draw in investors.
- Profile-You have an online presence and professional brand. This is how they grow to trust and get to know you.
- Patience-It takes a long time to build up a brand and build trust. Trust the process and lead with a personal brand. Be vulnerable so people can get to know you. Offer up value to your potential partners or clients, and they are more likely to do business with you. Eventually you want people to think of you as an authority in your niche.
HOW REED FINDS INVESTMENTS, INCLUDING SOME OFF-MARKET DEALS
Reed has 2,200 units to his name. He attributes his success to growing strong, quality relationships with everyone he deals with.
Finding deals off-market is hugely important and gives you first dibs on properties. How does Reed find these off-market deals? Relationships. He has an excellent relationship with the right brokers, and brokers are the ones with all the information and leads. He hangs out in the right spaces to be able to hear about the deals off-market. In an off-market deal, the broker can get an answer from you, and then take that answer back to the seller, so an off-market deal benefits all those involved.
How did Reed build the key relationship with the commercial groups? His partner has relationships with the people they were working with, and that’s how they got to know him. They took a risk on Reed and his partner, to see if they could close the deal, and they did. If a broker sees you as trustworthy, they will be willing to take a chance on you. You can even use your past deals as examples to create new relationships.
In the same way you want investors to get to know you and want to work with you, you need to be able to vet and trust your investors as well. It’s a two-way street, and not every investor is going to be right for you. You want to be working with the best investors, the ones who know the ins and outs of the business. It’s much better to find that an investor isn’t right for you before the deal is struck, rather than at the end, and a deal falls through or doesn’t go as planned.
HOW TO START RAISING MONEY FOR INVESTMENTS
Reed’s initial deal was funded by his personal funds. That was a great starting point for him. Now he uses syndication, which is pooling money with other individuals for a common purpose or goal. When you pool your money with others, you can create a bigger impact and potentially have a larger payout. Reed had a mentor he worked with, and that provided him the opportunity to co-syndicate a couple deals. He was able to prove to the broker, the seller, and the bank that he could come up with the funds and close the deal.
CONCLUSION
You can start from ground zero and build wealth investing in multifamily real estate. If you put in the time and effort to build the partnerships and look for the best deals, you can be as successful as Reed has become. The trick is to just jump in for that first deal. You have to be willing to push your boundaries, push yourself, and take risks. Some people never take that first step and try for their first deal. Face your worst-case scenario and see that it really isn’t all that bad. Over time, you’ll build the confidence and relationships you need to really be successful. If you need help taking that first step, talk to us at Josh Cantwell Coaching.
Listen to the full episode here.
Be Daring,
Josh
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