The Challenges of Breaking into Apartment Real Estate Investing

When you're dealing with multifamily assets, and it's a much higher dollar figure - seven, eight figures; generally eight figures - it's hard- if you're a new entity, and haven't proven yourself, so to speak, in buying that level of assets, it's very hard to be accepted or have your offer accepted by the seller, or by the broker. So, it takes a lot of time to break into that market.

Even when we were starting to get into multifamily, and though we had done deals in other markets and had a long history with other types of real estate, it took a good year and a half to get our first multifamily deal, even though we had put out multiple offers, et cetera. A lot of it was when a broker is bringing you to a buyer, or to a seller, rather, or when a seller is looking at your offer, what's going through their mind is, "How do I know that this person is going to close?"

Because there's a lot of risk, right? You have to bring millions of dollars to the table in order to close on the property. You have to secure tens of millions of dollars in financing. Again, there's a lot of due diligence, a lot of this legal stuff. Everything has to get orchestrated in a very short, compressed time frame in order for you to perform. So, their biggest concern is, "How do I know you're going to perform?"

Once you start closing these deals, and you have a bit of a track record, you can show them ... Even that, they want to see, in the last six months, how many deals have you closed? If it's longer than that, it's almost like starting from ground zero. So, it's very, very hard to break into those markets, and going from ... That's one of the biggest challenges, I'd say, going from single-family to multifamily-