Book SummaryThe Multifamily Millionaire Volume II, by Brian Murray and Brandon Turner

1-Page Summary1-Page Book Summary of The Multifamily Millionaire Volume II

Capital-Raising and Investing Approaches

This first section, as advised by Murray and Turner, covers the overarching strategy for investing, as well as structuring and funding big deals. Ensure you set clear criteria and then think carefully about whether partnering, through a syndicate or joint venture, will help you reach your goals.

Defining Investment Criteria For Target Properties

Before you start evaluating deals and putting together offers, Murray and Turner recommend that you set criteria for target properties. Determining your needs up front will not only refine your strategy for finding deals but also create efficiencies and make a more positive impression on potential partners, sellers, and brokers.

Focusing On Specific Properties, Locations, and Attributes

Murray and Turner say a major factor in achieving positive results in large multifamily investing is to hone your focus by establishing "crystal-clear criteria," or CCC. They define this as considering every potential investment strategy, location, property type, attribute, and financial target. They strongly encourage you to be as specific as possible so you can narrow properties to a manageable number you can realistically analyze and understand. In other words, avoid casting too wide a net. Start with the location or submarkets you're interested in.

When deciding on location and kinds of properties, consider multiple factors. For example, will you or a partner live near the projects? Most investors prefer to acquire properties in areas they are familiar with or to which they have reasonable access. After you've selected a target market, you should define the category and class of real estate, or combination of properties, that make the most sense for you. This should be based on your personal understanding, background, financial capacity, and risk tolerance. Other factors to consider include age, dimensions, occupancy rates, and desired returns.

Practical Tips

• Conduct mock negotiations with a friend or family member to refine your investment criteria. Take turns playing the role of buyer and seller, using your criteria to guide the negotiation process. This practice will help you become more comfortable and assertive in real investment discussions, ensuring your criteria are at the forefront of any deal.
• Use virtual reality tours to explore properties in different locations without leaving your home. Many real estate agencies now offer VR tours of properties, which can save you time and money on travel. This allows you to get a feel for the property and its surroundings, helping you to make more informed decisions about whether it fits your investment strategy.
• Implement a weekly reflection routine to evaluate personal goals by setting specific parameters. At the end of each week, write down your goals, the actions you took towards them, and rate your progress on a scale from 1 to 10. This helps you pinpoint what's working and what's not, allowing for more focused efforts in the following weeks.
• You can explore local trends by visiting neighborhood coffee shops and bulletin boards to understand what's important to the community. By immersing yourself in the local culture, you'll gain insights into the unique characteristics of different submarkets. For example, if you notice a lot of flyers for pet-related events, it might indicate a pet-friendly area, which could be a deciding factor in real estate or business investments.
• Conduct a two-week "proximity trial" where you simulate living near your projects. If possible, rent a place or stay with a friend in the area to experience the commute, local culture, and overall impact on your work-life balance. Take notes on your productivity, stress levels, and personal satisfaction to inform your decision.
• Use social media polls to gather opinions on different real estate classes. Post questions about various types of properties on platforms like Facebook or Instagram, asking your network what they perceive as the pros and cons of each based on their experiences. This can provide you with a broad range of insights and help you consider angles you might not have thought of on your own.
• Develop a habit of conducting mini-audits on your investments or assets quarterly. Set aside time every three months to review the age, dimensions, occupancy rates, and returns of your assets. Update any changes in a dedicated journal or digital document and reflect on whether these changes align with your goals. This could involve checking the condition of a property, measuring its usage or occupancy, and comparing the actual returns against your desired returns.

Factors: Proximity, Familiarity, Population, Employment Trends, Levels of Crime

As you begin to refine your search strategy for target properties, Murray and Turner suggest focusing on a few location attributes and prioritizing them, stating that every market has flaws, so it's ideal to determine what aspects matter most and attempt to locate a place with the optimal balance. They suggest focusing on areas that feature a renter population and high housing demand.

Which things should you prioritize? You might begin by examining population and employment growth. Murray suggests setting minimum populations as part of your investment criteria, while prioritizing areas with low unemployment and robust job creation in order to ensure there will be interest in your rental product. Also, think about a site's overall desirability. Pay attention to crime rates and trends, housing prices, and regulations concerning landlords and tenants.

Practical Tips

• Use a community-driven crime mapping service to stay informed about safety in various areas. These platforms often allow residents to report incidents, which provides a real-time, crowd-sourced view of neighborhood safety. Regularly checking this can guide you when considering moving to a new area or advising friends and...

The Multifamily Millionaire Volume II Summary Deal Sourcing, Evaluation, and Acquisition

This section covers what happens once you've identified your target property criteria and are prepared to start evaluating deals. Build connections with agents, consider off-market opportunities, prioritize leads effectively, and only then immerse yourself in in-depth analysis.

Finding and Evaluating Possible Opportunities

According to Murray and Turner, most big multifamily agreements are initially found through brokers. While many aspiring investors hope to find great deals outside of the market, it can be exceptionally challenging to go this route. That said, both Murray and Turner have extensive experience successfully negotiating off-market transactions, even in competitive areas, which can yield great returns.

Leveraging Broker Relationships and Unlisted Opportunities

Murray and Turner have found that developing relationships with brokers is an extremely effective method for making investments in substantial multifamily properties. They encourage you to focus on developing relationships with brokers who are most active in your target markets and emphasize the value they bring by noting that "in the end, brokers have a challenging job, face intense competition,...

The Multifamily Millionaire Volume II Summary Managing and Improving Your Property's Value

This section covers what happens after you close and get ready to start running your property. As a large investor, you need to find a good firm to manage the property and establish effective reporting and communication with them. You'll additionally oversee the implementation of your value-add plan.

Overseeing the Operations of Extensive Multi-Unit Properties

Once you've taken ownership of an income-producing multifamily property, the following move is to ensure you're maximizing its potential. This means getting the right property management team and having processes and communication in effect to allow you to oversee operations. Murray and Turner say your property manager might be your most crucial partner, since management of your properties affects the success of your investments.

Establishing Regular Communication and Key Performance Metrics

Every seasoned investor knows that good property managers are invaluable—they can make your life a lot easier and your investments a lot better. However, a quality property manager can only do their job if you know what's happening, which means ongoing communication. A property might run on its own for a while, but the...

The Multifamily Millionaire Volume II Summary Legal, Accounting, and Operational Considerations

This section covers the legal and accounting considerations that come into play for investors in large multifamily properties, particularly in terms of owning, operating, and eventually selling your property or properties.

Evaluating Ownership Structures and Entity Types

When you purchase a property, you need to determine the best way to hold it. That means choosing a legal structure and any appropriate tax designations. While it's easy to minimize the importance of getting this right and to focus instead on profits, costs, and other tangible aspects of property ownership and operation, it's a mistake to discount them. The worst that could happen with a wrong decision is significant financial and legal consequences, including losing assets and even facing incarceration.

Characteristics and Implications of LLCs, Corporations, Trusts, and Business Partnerships

While a sole proprietorship is the simplest of legal entity types, it offers little in the way of legal protections for real estate investors and is rarely an appropriate choice. Creating a corporation might be a beneficial option, but there are downsides. C corporations face "double taxation" and carry heavy...