Tribe of Multi Family Mentors Live Q&A w/ David Toupin

TL;DR

David Toupin shares insights on multi-family investing and mentorship.

Transcript

let's do it we're going what's up everyone what's up everyone chris lopez here and welcome to our live q a on the tribe of multi-family mentors here at bigger pockets this show has two main themes it's about multi-family and it's about mentors you know a lot of people in real estate want to invest in multi-family for the the long-term cash flow the... Read More

Key Insights

• David Toupin started investing in multi-family properties at the age of 19, emphasizing the importance of gaining knowledge and confidence in the field.
• He recommends spending hundreds of hours practicing and understanding the market before making the first investment.
• Toupin highlights the significance of mentorship in real estate, as it provides guidance and can significantly impact one's success.
• He advises against investing in solar panels for multi-family properties unless there are significant tax incentives, as tenants usually cover electricity costs.
• David stresses the importance of understanding property taxes and closing costs when underwriting deals to avoid unexpected financial burdens.
• For those new to investing, he suggests starting with house hacking or passive investment to gain experience while maintaining liquidity.
• He shares a cautionary tale about investing in markets heavily reliant on a single industry, as they can be volatile and risky.
• Toupin is developing a real estate software platform to streamline the process of analyzing and underwriting multi-family properties.

Questions & Answers

Q: What was it like trying to buy multi-family properties while in college?

David Toupin shares that the toughest part was gaining a base level of knowledge to be taken seriously by brokers. He wore a suit daily to boost his confidence and practiced underwriting deals extensively to understand the terminology and process. Despite skepticism due to his age, he persevered and successfully entered the market.

Q: Is it worth putting solar panels on a multi-family roof?

David advises against it unless there are significant tax incentives, as the upfront costs are high and tenants usually cover their electricity expenses. The savings don't significantly increase cash flow or NOI, making it an unattractive investment for multi-family properties.

Q: How did David sell a property with 75% occupancy at a big profit?

David Toupin shares a unique experience where a buyer with access to grant money from Hurricane Harvey approached him. The buyer was interested in the property's specific location and offered a significant profit, allowing David to sell the property despite its declining occupancy.

Q: What should someone do with $10,000 to invest in real estate?

David suggests investing in oneself through education and gaining knowledge about the market. He also recommends using the funds for living expenses while looking for deals or sending out marketing materials. Building a solid foundation of knowledge and experience is crucial before making significant investments.

Q: What are some no-goes when underwriting multi-family properties?

David emphasizes understanding property tax implications and closing costs, as they can significantly impact financial projections. He advises budgeting for renovations upfront, especially for major items, to avoid unexpected expenses and potential capital calls from investors.

Q: How should investors structure paying back those who helped close a deal?

David explains that there are various ways to structure deals, often involving an equity split such as 70/30 between investors and operators. The choice of structure depends on the deal's specifics and investor expectations, which can range from an 8% preferred return to a 50/50 split with no preferred return.

Q: What is David's advice for someone with $100,000 to invest?

David suggests house hacking a multi-family property, investing in oneself, or passively investing in a syndication deal. He stresses the importance of maintaining liquidity and being patient to find the right opportunity that aligns with one's financial goals.

Q: Is it worth investing $30,000 in a multi-family mentor's community?

David believes that while mentorship is valuable, spending $30,000 may not be necessary. He offers a more affordable option through his Real Estate Lab community, which provides education, resources, and networking opportunities for a fraction of the cost, helping investors learn and grow in the multi-family space.

Summary & Key Takeaways

• David Toupin, a successful young real estate investor, shares his journey and insights into multi-family investing, emphasizing the importance of mentorship and gaining foundational knowledge.

• He discusses various strategies for new investors, such as house hacking and passive investing, while stressing the need for financial literacy and maintaining liquidity.

• Toupin is working on a real estate software platform designed to simplify the process of underwriting multi-family properties, aiming to help both new and experienced investors.