I'm 29 and have spent the last five years in multifamily acquisitions at a large regional sponsor. I'm exploring the idea of eventually going out on my own as a GP. I have runway and I'm not expecting to raise big money right away.
My plan has been to focus on one or two tertiary markets, learn the market cold, buy a few small deals with my own capital, get operating reps, and develop some proprietary deal flow while figuring out my edge. Lately I'm questioning whether that's the best use of my limited time and capital. I could buy a couple of 4 to 8 unit deals, but that ties up most of my liquidity and has me spending a lot of time on problems that may not scale.
I have relationships with a couple lower market sponsors and could probably partner on something larger. But I also feel like hands-on operating experience is critical and I'd be skipping a step by going straight into a JV without it.
Does successfully owning and operating a few small deals actually help when you later try to syndicate a larger one, or is that experience too disconnected to matter? Would I be better off partnering on a larger deal earlier, even with less economics, so the track record is more relevant?
Yes.
Small deals can lead to big deals. Or keep doing small deals. There is no path. I’ve tried for years to look at small multi - I’ve just never wrapped my head around the deferred maintenance risk with such limited cash flow that you need to self manage on a 6 unit deals. Those deals near me are all 100 year old buildings and it feels like hot potato.
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