Raising the 30% need on your first apartment

I would love to hear a realistic ideas on how people are finding the 20% or 30% down especially on your first couple apartments when you don't really have the money in the beginning?

Contrary to popular belief, finding the money is actually not the hard part. Apartments continue to be one of the best investments around. The real challenge is gaining the resume and credentials that will give investors (and sellers for that matter) a comfort level with you and your ability to deliver results. In many areas today you are competing against multiple buying groups that often have deep pockets and proven track records. Currently, there are far more buyers than there are good deals. And, investors like to know that you have real skin in the game. They'll want to see that you are personally are putting up at least 20% of the 30% - more, or less, depending on your track record. You don't get to play with other people's money until they know exactly who they are dealing with.

Do not be misled that anyone with "the secret formula" can rapidly become a successful MF investor sitting in their jammies hunting down even less sophisticated investors over social media. To hear the gurus tell it, anyone can do it - you just need to buy their program. What the best ones don't tell you is they make far more selling magic beans than they ever made doing deals. Living the good life off mailbox money sounds great, but all the mailboxes I’ve seen have been at the end of a long road of sweat and tears.

Gaining a track record takes hard work, training, persistence and experience. Once you have the credentials, participate all you can with your local apartment association, investor clubs, and business groups. If you have the juice, the money will flow. Real money knows what it's doing, makes challenging demands, expects a good return, has little tolerance for surprises and appreciates professionalism. There are people out there with more money than sense - and some do get lucky, but as we all know, luck favors the well prepared.

You must also be careful not to run afoul of SEC regulations when soliciting investors. The simplest approach is to only deal with accredited investors; but here again, accredited investors know what they are doing and will insist on returns commensurate with the inherent risks in the deal - if you are an unknown, you add additional risk. Players may be more likely to think of you as a facilitator worthy of a few points, rather than a king maker. Good investors are always looking to maximize returns and minimize risks, but in the end, he who has the gold really does get to make the rules.

When starting out, be realistic about the size of deal you are qualified to go after. This has a lot to do with how much of your own time and money you are willing and able to put up. Be patient. Gain some experience in the sand lots where the big kids don't play, then work your way up to the golden-glory gym.

In our Texas-based group we have a 30-year multifamily executive and licensed broker, a real estate attorney and CPA, an international business consultant and economist, and an advisory board of legendary deal makers - all working apartments 60 hours a week. Even with all this, good deals are still challenging to come by, structure and close. Of course, we all started somewhere...

Best of luck in your pursuits.

Thank you so much for your time and your outlook. This is pretty much basically what I've been seeing so I am going to restructure my focus and look for a smaller deals and go from there,but again thank you.