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Multi-family properties can form a core part of your real estate portfolio, providing a solid stream of cash flow for any investor. But are there any secrets to successful multi-family investments?
We recently had the pleasure of speaking with Jens Nielsen, a Multi-Family Housing investor and coach who manages his own $45 million portfolio of multi-family investments and provides one-on-one coaching for both real estate investment novices and seasoned investors.
Nielsen himself has invested in 700 units and wholly owns 75 units. His owned portfolio spans geographies that include New Mexico and Colorado (his home state), and his syndicated investments are in Phoenix, AZ; Atlanta, GA; and Erie, PA.
From his wealth of experience, Nielsen generously offers these critical tips for multi-family real estate investors who are focused on multi-family properties.
With those foundational strategies in place, you're well positioned to invest and expand. "People often think too small and too local," says Nielsen. "Capital is always a challenge, so if you don't have a lot of money to invest, team up with other investors." He suggests that new investors start with as few as four investments and then slowly ramp up to more.
As you build your confidence and see returns you can expand. Some investors choose to buy properties near their homes, but some of the opportunities could be across the country. "Invest where the numbers make sense and live where you want to live."
Like investing in stocks, diversification can be important. If you have the capital and risk tolerance, build a portfolio of multi-family properties that span a range of geographies and have a range of potential for return on investment. For example, if you invest in an area that's still gentrifying or is highly speculative, balance it out with other properties in proven growth areas.
You don't need to have a real estate background to be a successful investor. Nielsen, for example, was an IT manager before he began investing in multi-family properties. The right research, partners, and analytics technologies (along with commitment and patience) can pay off in the long run. You'll be providing great housing options for consumers and a steady income stream for yourself. That philosophy is reflected in Nielsen's company tagline: "Helping people live their lives to the fullest through investing in real estate."
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