Do you need acquisition experience to start buying deals?
I understand you want to buy the property at the right price and need to be realistic with expense and exit assumptions, but does it all come down to having the cash to invest and the ability to stomach the risk? I hear about all these high paid non-RE professionals buying real estate...I guess it all depends on how much you want to scale this endeavor.
You do not need acquisitions-specific experience to buy your own deals, correct. You only need money.
You need money and the ability to grind thru 6-24 months of looking at terrible deals to find your first diamond in the rough.
No you don't need experience in acquisitions to start buying real estate. Would it be helpful? Sure, but definitely not a necessity. There are plenty of non-RE people who invest in real estate. What you need is capital, an appetite for risk, common sense understand of revenue - cost = profit, and conviction in your assumptions.
Depends on the type of deal (ie - acquiring an already operating asset v. development), but generally speaking it is a money thing over everything else.
I'm going to be the devil's advocate here and say that actually, you need money.
Don't want to hijack but I wanted to ask a relevant question. Let's say I have limited experience in LIHTC but have found a great site that ik would score well on the QAP. What would I need before I can get a reputable Co-Dev on board and take a piece of the dev fee? I have limited experience but have a foot in in terms of finding suitable sites.
You'd need the site locked up.
Predev dollars are the riskiest piece of any deal. If you're willing to put those out and tie up the land and get started on entitlements, then you have a strong position to bargain from if you bring in a codeveloper.
Yep, pretty much. Obviously you'll need to do some basic underwriting but at the end of the day don't miss the forest for the trees - having actual acquisitions experience can be really harmful, actually, because most people who work for a big fund/operator/etc and want to go out on their own are the very picture of "confidently incorrect" when it comes to budgeting and underwriting. Experience predicated on having worked for a multi billion dollar company with a ton of back office and asset management support can give a very warped view on what it actually takes to run a building.
This is sort of tangential, but... who are you hearing about these people from? They themselves? Social media? Word of mouth? I cannot believe this has to be said to a forum full of finance professionals, or really anyone in this day and age, but anyone who is telling you all about how much they're paid or how successful they are, is almost certainly lying/exaggerating. You should assume anything you see/hear/watch on social media is dangerously misleading at best and more likely outright and deliberately mendacious.
People who have had actual successes are usually pretty low key about it, and certainly more likely to boast about the reason for their success (good investment thesis, partners, etc) and not about the consequence of it (the money they're making). Any time someone sees fit to mention how much they're pulling in, I feel they can immediately be written off as a person who has had almost no real success and never will.
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