Today Tom is joined by multifamily real estate investor and host of the Old Dawgs REI podcast Bill Manassero to discuss Bill's story and how he got started in multifamily investing, the importance of systematizing your business, emerging markets, and so much more.
Bill began with two single family homes and a duplex. He paid roughly the same for each property. Bill began to see the duplex was generating twice as much cash flow. If a tenant left, the vacancy rate in the duplex was 50% compared to 100% vacancy for a SFH. All properties had one property tax payment and one roof to deal with. Factors like these got Bill thinking about economies of scale and had him wondering why he wasn't looking at properties with more units. When committing to property management with larger properties and seeing the multiplication factor of value-add and increased rents, Bill's began focusing heavily on multifamily properties.
Could an Investor Jump Right Into Multifamily?
For investors who have owned a single family home during their life and are familiar with brokers, escrow, financing, and other basics of owning a home, the jump to multifamily can be easier than some may think. There are definitely other considerations, but if you dig a bit deeper and do specific due diligence, it's not all that different. Operations can actually end up running very smoothly with the proper support system in place, a luxury often not available to someone with a portfolio with exclusively single family homes.
There are some markets that are unrelenting. Markets such as Dallas are not slowing down because people are moving there. Job growth leading to population growth is the strongest indicator of a solid market. Other areas, such as the West Coast and Florida and some areas in the Carolinas are also strong, but we're seeing a sellers market right now. With that said, secondary and tertiary markets have great opportunities, such as Nashville. Indiana and the Pacific Northwest are also nice markets right now. These secondary and tertiary markets are often growing with the sprawl of larger nearby cities.
Towards the end of the show, Bill shares experience with taxes, his favorite piece of technology, and his favorite real estate investing book. In the debrief section, Tom shares his thoughts about systematizing and offers a few books on how to develop a scalable enterprise through systems.
Learn more about Bill and his work: https://olddawgsreinetwork.com/