What types of real estate side hustles do people have? My intention is to work in real estate in a full-time capacity, but also have a side hustle like owning my own commercial properties or being a broker. I would like to hear of anyone's experiences with their real estate side hustles and if it is actually feasible while working full-time. Feel free to share both success and failures.
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Depends. Where are you working, and what is your "side hustle"? Being a broker while being a full time analyst for a REPE shop isn't feasible. Owning a small multifamily building on the side, and even self-managing it? Much easier.
A lot of it comes down to corporate culture. Lots of place won't mind if you're running a couple units on the side, in a certain light it can be accretive to your skill set as a developer/acquisitions employee.
I owned a couple small multifamily buildings while working for a developer, and it was fine as long as it didn't interfere with getting my shit done for my job. Was also a great launching pad, as it gave me the small amount of income and security to go out on my own
What was your first deal? Owner occupied duplex or something similar? I’m looking at doing this but finding deals that CFADS positive at 3.5%-5% down is impossible right now. Would almost prefer a correction to reset seller expectations.
I sold weed for a couple years while I was an analyst. Really helped bridge the gap when I was making a small salary with no bonus
$30 / Unit, $10 one time allowance for paraphernalia, 6% / 4% commission on new and renewing business respectively,
Northern Virginia for all of the ground up builds and District of Columbia for the condo units. The ground up builds have averaged under 2,500 sf but one was, like, 3,500 sf and one was less than 2,000 sf.
I want to get into building really space efficient homes that are in the 1,500-2,000 sf range. Target audience is middle and upper-middle class people. I think people with honest, gainful employment should be able to afford a nice home in America. That's my passion.
This is going to sound difficult, but “Easiest” side hustle would be buying a 60+ unit multi with 90%+ occupancy where you can hire on-site third party management. Freddie Mac small balance would finance 80% of purchase price + rehab with 3 yrs of IO at 5.15% (give or take 20bps) on a 10/30. Freddie Small balance doesn’t require ownership experience however you or you and your partners need to have net worth equal to 100% of the loan amount and post closing liquidity equal to 10% of the loan amount. Hardest part of pulling this off is 1- finding a deal, 2- finding a high net worth person that will sign non-recourse carve outs, and 3- raising the equity via 506 d syndication. 1- Cap rates are too tight to qualify for 80% in most markets (Freddie is constrained at a 1.25x dscr), so your deal needs to be either off market (truly off market) or in a secondary or tertiary market (Albany, Greensboro, Tulsa, Spokane, etc). 2- people will sign carveouts if you find the deal and/or raise some of the equity. Their share of economics is totally dependent on what you negotiate. 3- raising equity. Network with hnw individuals interested in investing in real estate. Don’t wait until you have a deal under contract to close this. Hire a good securities lawyer.
That’s the “easy” way to buy small multi. Finding the deal, raising the equity, etc is painful but once you close it’s very little work. 2nd deal and all deals after this will also be a lot easier to close.
The alternative is flipping single family, buying a 2-4 house hack 3% down deal with no cash flow, wholesaling, etc. All these strategies can make money and are easier to get into, but in the long run, less passive, less money and not as scalable.