For years I fantasized about “flipping” a house and making a quick burst of cash for my efforts. Finding a “dud” and turning it into a “stud”, letting my design dreams soar and creating a forever home for a grateful (and generously well-paying) new owner. I knew I could somehow manage to squeeze in this side-hustle on top of my demanding full-time job, if only I could find the right property in my neighborhood. And I was sure the result of my project would be so successful and financially rewarding that, heck, I might just jump into the flipping game full-time, traditional career path be damned!
So I did what anyone in my shoes might, I began my hunt in earnest. I walked a well-worn path around my neighborhood, identifying the most weathered and weary houses on each block. I took mental and physical notes on homes that seemed to be neglected, under-occupied or vacant. I took sneaky snapshots of exteriors and compared them over time to see if cars had come, mail was piling up or if the overgrown yard had been tended to or ignored. I searched the web for local pre-foreclosure homes and connected with brokers. I noted addresses and researched property records to understand chain-of-title and with whom I’d be negotiating my amazing off-market deal.
My hopes were high (and my dogs were getting plenty of exercise) as I trudged around asking neighbors if they knew anyone who might sell to someone who couldn’t “quite” afford to pay retail in the area. And yes, I even dropped a series of hand-written notes to the homes where I thought my fortunes might lie. Surely, someone could look past profit and give a break to an earnest buyer in need of a yard for her pups?
Alas, this was not to be. And while my dreams of an affordable property in the mean streets of Los Angeles did not materialize, what did occur – without my even realizing – was my own immersive and formative education into the world of Real Estate Investing. Would I buy and flip this mystery property? Let me study, learn and plan. Should I buy and hold with a long-term renter? Let me understand the Tenant/Landlord laws in this city. Was buying and outfitting the property into an Airbnb rental unit the most profitable angle to take? Let me study the requirements and systems of the most successful short-term rental properties. What about the BRRRR method, so I could rinse and repeat with properties 2, 3 and beyond? Let me learn from others how to build a team and execute at scale. In the end, my “flight of fancy” was actually a process of education earned with every step through my neighborhood and plenty of dedicated research.
I had been bit by the Real Estate Investing bug and yet was priced out of my local market. So “now what?”. Where could I invest if not within arms reach here in Los Angeles? The research and education continued as I explored out-of-state investments including turn-key single-family homes, commercial Real Estate Funds, Mobile Homes and other forms of both hands-on and more passive investments. I had a vision to fulfill and needed to find the path that was right for me. Thankfully, it finally clicked. I found my Real Estate “soulmate” in passive Multi-Family (Apartment) investing.
Why did Multi-Family syndications strike such a chord? Let’s be honest, I was looking for stellar and safe returns on my money, and in my own market the cost-of-entry, lack of deals and questionable returns were simply not worth the risk. I’m admittedly a bit of a control freak and I didn’t like the idea of having a single home in an unfamiliar market exposed to intruders, tenant damage or the dreaded 100% vacancy. Leveraging the typical 5-year investment term of a Multi-Family syndication deal felt both compelling (fantastic ROI) and manageable (passive!). I wasn’t ready to make the “leap” into another career when I was making a solid income, and instead found a path to accelerate my road to financial freedom. I could “try this on” without changing my day-to-day and see where it led…
My experiences in MF have been more than I could have wished for. I have such a passion for this asset class and the results it can deliver (when working with the right deal sponsors). I even founded my own company so I can share that passion and the opportunity it affords with others who are in my same circumstance: W-2 employees who demand more out of their investments and out of their lives.
Today, I get a thrill out of visiting our properties. Once we’re under contract I get to see first-hand the areas for improvement and envision a new future for the community based on our business plan. During our hold period I visit units in the midst of a remodel to gauge progress and explore the finished product of those that have been completed. Interior and exterior improvements, including amenities, common spaces and property re-branding all bring positive changes that improve the quality of life for the community and deliver great returns for me and my investors. And I get to experience all of this without getting my hands dirty or pulling my hair out like I did after experiencing my own remodeling “Hell”. Having found the means to “scratch my real estate itch” in such a painless and profitable way continues to be the most rewarding “walk” I’ve taken in any neighborhood.
Are you looking to jump into Real Estate Investing, where a passive approach might work best for your circumstances? From my experience, it’s so much nicer to let others do the work while you kick back and reap the rewards. And you can still “scratch that itch” by visiting your investment properties, even as a limited partner! Echo Investment Partners can help educate you on the benefits of passive Multi-Family syndications. To learn more, send us an email at Melinda@
About the Author:
Melinda is the Founder and CEO of Echo Investment Partners and resides in Los Angeles, CA. As a commercial retail investor, multi-family investor and syndicator, she founded Echo Investment Partners in 2015. As a General and Limited Partner she has helped to provide funds to purchase over 2,500 apartment units valued at over $280M now under management. With the goal of helping accredited and professional investors develop passive streams of income through real estate, Melinda’s focus is on the stable, significant and timely returns that large multi-family investments deliver.
On a mission to share the benefits of passive investing through multi-family real estate.