Gabe Bowling has a helluva story. At 25 years old he owns 55 units of multifamily real estate and it all came from a single $10,000,000 transaction. Lord knows I didn’t own jack at 25 years old. So what’s Gabe doing that we aren’t? Well to start he uses crexi.com to find multifamily properties and if it looks interesting, he starts running the numbers.
In fact Gabe actually sells a little napkin underwriting tool for just $7. It helps him analyze all those deals a little bit quicker than manually. He even offers you a free course on his website GabeBowling.com. All you gotta do is plug in the units, purchase price (not you’ll actually pay, but worst case scenario right?), average rent, occupancy rate, and expense ratio.
Then figure out whatever the rent premium is if you make some slight improvements. It could be an extra $150-$200…over course Crexi can help you with that. The next step is finding out out the type of loan you can get for the property…For example, if you can get one that’s 65% of the purchase price, you’ll need to come up with the remaining 35%.
After that, you just enter the little interest rate in Gabe’s little Google Sheet and you get a projected return summary. Then that tool will spit out a pretty clear indicator of whether or not you should even try your hand at that deal. Look at it this way. If you had an 80/20 split with investors and held the apartment building for 5 years, you’ll be able to show them cashflow, annualized returns, and the equity investors can expect.
“So all I’m gonna do at this point,” Gabe explains, “is I’m gonna look at the deal, I’m gonna ask myself, do I wanna spend more time pursuing this based on the return I’m seeing? If so, if the return sounded good to me, now I gotta reach out to the broker and start verifying all of the information, and then move into a much more detailed underwriting model to help me make a confident decision whether or not to buy the property. Either way, build relationships with these brokers. Ask them to send you deals.”
“You have to be looking at deals every single day,” he emphasizes. “Then, just to recap, you wanna look at each deal at a high level. Call it back-of-the-napkin math. What does this deal look like? Are you even interested? I’ll teach you how to set your buying criteria so you’ll instantly know whether to pass on it, or pursue it. Once you have one that checks all your boxes, you reach out to the broker, start verifying the information, the numbers, and just make sure everything checks out.”
Alright, so that’s great and all, but how do you talk them down on price? How do you go about getting a loan? How do you get investors that aren’t gonna bully you into a small percentage of the deal? Here’s the kicker…Gabe says you find all that out in his How To Buy Multifamily course. Now I’m not discounting Gabe’s wisdom, but I’d probably want to see a few more deals under his belt before I take what he says seriously. I’m not trying to follow a potential one-hit-wonder ya feel me?