Multi-family is EASIER for beginners

Hey guys. So today we're talking about why multifamily investing is easier than single family investing. Today me and my partner focus on buying 30 plus unit apartment complexes only because after many years of being in single family rentals and even being successful in single family rentals, we have found that apartments, first off, if you do them right, they are more passive, they are more scalable, they have a higher roi, they are safer in a bad market, which if you didn't see the video I did last week, you'll see where I break that down even in a bad economy. And they're easier to get into for beginners. So in this video we're going to break down the points that make it superior, make it better and easier than single family. Okay, if you don't know me, my name is Jonathan Cronin. Me and my partner help Christians and people get into apartments buying apartments. So the goal is to create a greater impact with their time and money. So let's jump in. The first thing is what normally happens with single family investing is people. And you may be in a boat where you do this, you go and you either flip you wholesale or you do the BRR strategy where you go and find a good deal where you can be in at 70% or whatever of the value of the after repair value and then you fix it up, you renovate it, you put it on the market, you rent it and then you refinance it and you try and go find another deal as quickly as possible. Okay? And all you did in that one, after you get it, which the average is about, you know, maybe two or $300 extra a month in rental income from that single family home. So you just went through all of this, created basically a full time job. And that's what we've realized is, you know, in the single family realm, we were really successful, but it created a whole other job. And you just did all of that just, just to create two or three hundred dollars extra per month in income. Maybe yours is better, maybe you're 4 or $500. But if you really want to replace your income, you really want to be passive, you've got to do that 10, 15 times to truly make substantial income and actually replace your current income to live off of retirement worthy income. You're not going to do that very quickly through the single family realm. So today we're going to talk about the first thing to understand in apartments is it's more passive. Why is it more passive? Well, first off, you can hire a higher level mark managing Company, management company. So when you're looking at 30 plus units like we do, you're able to hire for one an in house manager. But more than that, you're able to hire somebody who's professional, who they're not calling you in the middle of the night whenever the cops show up. You know, there's not, you're not getting the calls for the major issues. Now you may have to fire your management company or you know, go tell them hey, we've got to improve or whatever. But that's on your time. That's you know, know, say on your monthly call with the management company or whatever that looks like. And with single family, you're not going to be able to do that even you're, if you have a property management company, you're probably getting the major issue calls and you don't have somebody on site that can keep an eye on things. And the other reason why it's super passive is because you're buying one deal versus 100 or however many you want to do. Like if you, if your goal is 15 single families, you're going to have to close 15 transactions. You're going to have to find and close 15 transactions versus buying an apartment complex. You buy one transaction. Second thing, and we're going to go over three major things and we're on the second one is it's easier. Why is it easier? Well, first off, for beginners, for someone who's not in the game, not in apartments, how can it possibly be easier? Well, it's not dependent on your cash or credit. Okay. There are so many investors out there and people who have high income producing jobs who are looking for a safe place to put their cash. Okay. And if you're in the apartment gang, we have several people, we have a mastermind that brings together investors and, and people who are looking to get in an apartment game but also are already in it. And we realized that the biggest thing needed is funding and deal flow. Okay. As a beginner you can get both of those things. It don't matter where you're at on the spectrum. Like you know, investors and people with high paying jobs are just trying to find places like apartments. They're not necessarily trying to go in on every little deal with you. The single family rentals, like that sounds fun for some people, but the high level people are just wanting to put a big chunk of cash into something that they know is going to return. Real estate is going to return. Real estate is a safe bet and apartments are even, even better. So basically if you can learn how to find the deal because a lot of people ask, well, how can I provide value as a beginner? If you can learn how to find the deal, if you can learn how to structure it, manage it, or whatever else helps make the deal profitable and makes the apartment deal profitable, investors are going to flock to you to lend you their credit, lend you their time. Okay? And the last thing I'm going to touch on is apartment syndications. Apartment investing is safer and more lucrative and scalable. Okay? So if you learn to create streams of leads, what did I mention? The biggest thing needed is deal flow. If you learn to create machines of off market deal flow, you will be able to pick the ones where you are in at 70 to 80% of the stabilized value. Now in single family, they would probably use the word after repair value because again, it's not single family is not based off of the value of the property, is not based off of profit or income, what you can actually do in it. It's based off comps in the area. Well, apartments and commercial is based off of profit and how you're managing the business. And so if you can be in at 70 to 80% of the stabilized value, which is the end goal, you know, you raise the rents to market rate, you get the occupancy over 90% and then you're already in from the beginning at 78%. That means you immediately out of the gate have equity in the Property, have, have 20 to 30% equity in the property, assuming it's, it's stabilized. And then if the market tanks, you are still cash flowing or at worst you're breaking even. Okay, another point, if you have more units, that means you have more room for vacancy, okay? Whereas a single family home, you have no room for vacancies. If you don't have someone in the property, you're not cash flowing. You know, if you have a hundred units property, then you lose 10 people, walk out the door right now, then all of a sudden you're still at 90% occupancy and you still are more than likely cash flowing. I've seen some properties even cash flowing at 80% occupancy. So you can have 20 units just vacant and you're still, you're still making, paying the bills, you're still, you know, profiting and you still have a good property. So again, safer. What does it mean to be safer? And the last thing I'll touch on is, is the more units means the higher multiplication factor. And like I mentioned, a single family is based off comps and the value and, and a large apartment complex is based off of the income that you're producing. Okay. And other factors too. But a major way you value it is a multiple of the profit or the cap rate divided by the profit. And so just take for instance on a single family, say you even have five single families. Say I'm contemplating whether I want to go buy five single families or one multi family. Well, say you take five single families and you increase the rent 100 bucks. Okay? So five times 100 is five. You just added 500 extra dollars per month in income. The properties are still valued based on the comps, but you've increased your income by $500 a month and that's great. Now you say, well, there's investors that will pay more for those properties because you've been bringing in a certain amount of income. And that's true. But as a general rule of thumb, it's based off comps. Now say you were to take that same amount of money, put it into an apartment complex within a syndication and you were to get to say 30 units. You increase the rent $100 on 30 units a month. That's $3,000 per month that you just added to the bottom line and then divided by it can be 7 to 10 times multiple in the value just created. So $3,000 times 12, that's $36,000. You just, you more than likely increase the value to the property. 300K, $300,000 just went into the value and you created that. So you just created $300,000 within however long this is taking you, ideally within 12 months. So anyway, that's my spill. I hope that you got something from that. I could go on all day about why apartments are better, but for me, I, I am not. I don't want to be a full time real estate investor. I love real estate. I have several businesses, I have several real estate properties, I have several companies that are doing extremely well. And I love seeing business happen because God literally has blessed me outrageously and my family to be able to create these businesses. But for me it's for the sake of mission, it's for the sake of ministry. And so I want to do what I love to do. And maybe you want to do something similar, or maybe you just want to be able to retire, or maybe you want to be able to create more time, quit your job and create more time freedoms in your schedule and be with family more or whatever that is for you. But if you are looking to be passive, you are looking to create the highest ROI possible for you and your family to replace your income the quickest. I'm telling you, it's through apartment complexes. Now there's probably people with a lot of different opinions, obviously, because there's full time people in every other field. So please share those comments and share what you think, the questions or arguments, whatever you have, share it in the comments. I love, love, love to hear it. I'm always trying to improve and that's the point of the mastermind Larry and I have created. And we'd love. If you feel like you want to be a part of that, we'd love to talk with you. In fact, I'm going to put a link in the description shows you exactly how we how our team was able to create over a million dollars in equity in 14 months in just 14 months. One property, just one deal, one real estate deal created a million dollars in equity in 14 months. And then there's even another one that did double that. So if you want to see that video, I'm going to pop the link in the description, check it out, let us know what you think. We'd love to hear from you. All right, have a great day. Bye.