There are a lot of people out there trying to tell you how to get started. I hear about seminars all that time that make grand promises. And I know that works for some people. My good friend Robert Kiyosaki, who wrote Rich Dad Poor Dad, got his start in real estate through a $300 real estate seminar. Other people can get what they need from reading a book. I’ve had 100’s of letters written to me thanking me for writing, The ABC’ of Real Estate Investing. These readers were able to take the lessons from the book, apply them and make millions.
I’m probably not as smart as those people because that was not the path I took. I know how I learn best, and that is through doing. I prefer jumping in and taking action. Reading a book or attending a lecture can be great, but it’s not the most effective for me. This need to take action is probably why I made so many mistakes early on, but if you can learn from mistakes you’ll get more value from your mistakes than a $100K tuition. And let’s be honest, I’m still making mistakes daily and learning from them and adjusting because of them.
I highly recommend learning about multifamily home investing the way I did. I believe in the saying, “work to LEARN, not to EARN”. That is exactly what I did. Right after college I was stuck with student debt and had no idea how to get a job, pay my bills or what I wanted to do with my life.
Fortune smiled at me and gave me the greatest opportunity ever, a job as a Property Manager! It wasn’t an easy job… in fact it was a lot of work, with long hours and difficult situations. My first task was to fire the current Property Manager and his assistant! WHAT?!? I did not know how to do that, but I learned. I asked questions and I kept learning and kept asking more questions.
I quickly came to realize that I liked this business. It became the best training I’ve ever had. It became my competitive advantage in the future when I went into business for myself. Becoming a Property Manager taught me a lot about the business. It was a huge education. I figured out how to do the books. I learned how to market for multifamily apartments. I learned the value of keeping the property full of tenants, as well as how to do it. And I learned how to keep a property clean and well maintained.
It was the best education one could ever have. This is my recommendation for you. Don’t be scared. Don’t be lazy. Go out there and get a job as a Property Manager. Don’t do it for the pay. Do it for the education. I was a field (on site) Property Manager for 1 full year, then moved to regional management for eight more years. I’m not saying you need to spend nine years doing this, but one year of field property management is worth way more than a year in college… or four years.
I believe in this method of learning so strongly that I still use it today in my corporate office of 250 employees. When you come to work for MC Companies, you start out in the field. You manage properties. You learn every aspect of the business.
This form of active education is so effective, that I also believe its one of the reasons people seek us out to work for us. We get the best of the best because we train them to be the best. My corporate employees know exactly what is required in the field and know exactly what the management teams need to be successful. They also know when someone is giving excuses or not living up to the job. In your future as a multifamily investor you’ll be hiring many property managers. Wouldn’t it be invaluable to know what you can and should truly expect from them?
There are two other things that you’ll learn managing properties: What residents (customers) want and what investors are looking for. When you are fighting day in and day out to keep your occupancy full you learn real fast what attracts new residents to move in and what keeps existing residents to stay. Here is a hint, they are not the same things.
The second thing you’ll learn is what investors are looking for. This is possibly the most valuable lesson you can learn when starting out. When you are first starting out you do not have a track record of success to show an investor. Instead you will show them how great the deal you’ve found is. You will learn exactly what the investors consider a good deal and you’ll learn how to communicate this to them in their language. You’ll show them where current management is failing and your plan to rectify those failings. What better way to learn those skills and knowledge set then being a Property Manager.
When I first decided to make the jump from Property Manager employee to multifamily investor I was worried about financing. How would I attract investors? How would I pay for the huge down payment? What I found was there’s a lot more money out there than deals. And through my job as a Property Manager, I learned how to speak with these people in a way that bred confidence and in a structure that addressed all their concerns. Learning what those concerns are was invaluable to my current success.
I owe much of my success to my experience as a Property Manager and my ability to learn from my mistakes. The great thing about making mistakes on a property that isn’t yours is that you don’t have to pay for those mistakes. You just get to learn from them.