When it comes to building long-term wealth, multifamily real estate investing is one of the most powerful vehicles out there. But here’s the truth: it’s not for everyone. Multifamily real estate is a marathon, not a sprint. It takes grit, discipline, and a willingness to embrace setbacks as part of the journey.
In this blog post, I’m going to pull back the curtain on what it really takes to succeed in multifamily real estate investing. If you’re willing to roll up your sleeves and commit to the long haul, this path can change your life.
The Marathon Mindset
Multifamily real estate investing isn’t about quick wins or instant gratification. It’s about building wealth over 10, 20, or even 30 years. To succeed, you need to:
- Accept Delayed Gratification: Returns often take years to materialize. During that time, you’ll be investing your time, money, and energy into deals that may not pay off immediately.
- Learn from Losses: My personal journey includes a $60,000 loss on a 20-unit deal in Tampa. Mistakes happen, but they’re some of the best teachers if you’re willing to learn.
- Commit to Continuous Education: You’ll need to stay sharp, whether that’s through books, podcasts, networking, or mentors. This game rewards the lifelong learner.
What It Takes to Get Started
Success in multifamily real estate starts with preparation and the right mindset. Here are the essentials:
1. Education
Knowledge is your greatest tool. Dive into books, listen to podcasts, attend meetups, and watch educational content. The more you learn, the better prepared you’ll be to navigate the challenges ahead.
2. Building Your Team
Multifamily real estate is a team sport. You need to surround yourself with partners who bring complementary skills to the table. Think of roles like:
- Underwriters
- Boots-on-the-ground property managers
- Capital raisers
- Contractors
3. Structuring Deals
Most multifamily investors start with little to no capital. That’s where syndications come in. By raising funds from limited partners (investors), you can structure deals that give you equity without requiring significant upfront investment. Key components include:
- Acquisition Fees: Typically 1-3% of the purchase price, split among the partnership team.
- Equity Stake: Rolling your acquisition fee into the deal to gain a long-term share of the profits.
The Challenges You’ll Face
This journey isn’t easy. Be prepared for:
- Steep Competition: You’ll be bidding against seasoned professionals who know the market inside and out.
- Setbacks and Losses: Not every deal will be a winner. Some may cost you money, time, or even relationships.
- Time-Intensive Work: If you’re balancing a W-2 job like I am, expect to spend mornings, evenings, and weekends grinding to make this work.
The Long-Term Payoff
So why stick with it? Because multifamily real estate is a wealth-building machine. By reinvesting profits from your first few deals into new opportunities, you can create compounding growth over time. Here’s how:
- Acquire Equity: Build equity in properties by investing your acquisition fees or contributing capital.
- Reinvest Profits: Use profits from refinancing or selling properties to fund future deals.
- Achieve Financial Freedom: Over time, your investments can generate enough passive income to cover your living expenses and more.
My goal is to reach $2-3 million invested, earning a steady 4-8% return. That’s the freedom number I’m chasing—and you can do it too with the right strategy and determination.
Is Multifamily Real Estate Right for You?
If you’re someone who thrives on hard work, embraces challenges, and is willing to play the long game, multifamily real estate could be your path to financial freedom. But if you’re looking for quick wins or a passive approach, this might not be the right fit.
Take a moment to reflect: Are you ready to sacrifice today for the rewards of tomorrow? If so, it’s time to swing your axe and start building your empire.
Let’s Build Together
If you’re ready to take the leap, I’m here to help. Reach out to me on Instagram, Facebook, or visit my website Small Axe Communities to learn more. Let’s connect, learn, and grow together.
Remember, it only takes a small axe to build a lasting empire. Keep sharpening your skills, and let’s crush it together!
Ready to Learn More? Check out my latest podcast episode where I break down everything you need to know about succeeding in multifamily real estate. Listen here!
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