What comes first? The chicken or the egg analogy

Hi All,

New member here, thanks for having me.

While my cousin and I have been investing in real estate for many years, we're new to multi-family investing and we're faced with the dilemma of how to go about doing this initially:

We're under the impression that brokers are going to be leery of spending a lot of time with us since we don't yet have a track record and they want to close deals - we get that, we want to close deals too. Additionally, even if a broker brought us a property that we wanted to acquire, we don't yet have any capital lined up to make it happen.

On the flip side of that, we're under the impression that partners/investors are only going to commit money to us if they have an actual opportunity in front of them that they can analyze.

Just like the chicken and the egg analogy.

In the meantime, we're working on our business plan so we can get down on paper exactly what it is we want to accomplish and how we're going to go about doing that. We plan to share our business plan with our sources of capital (investors, banks) and possibly with other members of our team as well.

How did you purchase your first property? Also note that we have little (if any) of our own cash to bring to the table, so bootstrapping our first purchase is unlikely.

Thanks for your feedback, it's very much appreciated. Please also correct us if our assumptions are incorrect.

Thanks,
Howard

Howard,

I see this post is from a month ago but wanted to give you some feedback. My first property I bought was from raising private money. In this market cash is king. If you can raise some money and buy with cash you can find a great deal. key is having the cash to move quickly.

I am from a financing background. Even though you don't have other multifamily properties, if you have good credit and the property cash flows you can refinance and pay your investors back. Few things lenders will look for:

720 Fico score preferred
1.25 DSCR - must cash flow
Experience - can list your other properties you own
Management Company in place
75 LTV
85% of units occupied minimal

Any questions or scenarios let me know.



Sean Watson
Managing Partner
Watson & Donohue Capital
64 E. Uwchlan Ave #235
Exton, Pa 19341
484.680.3840
www.watsondonohuecap.com
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