Financial Freedom with Real Estate Investing MB 225: How to Stay Committed to Your Multifamily Goals – With Ed Hermsen
According to the Law of the First Deal, a multifamily investor who buys their first apartment building will do their second and third deals in rapid succession, achieving financial freedom in just a year or two. But there is an exception to every rule, and Ed Hermsen is the ONE investor I know who did his first deal—and then life got in the way. So, what can he teach us about keeping momentum and staying committed to our multifamily goals?
Ed grew a portfolio of single-family rentals while working as a mortgage loan officer in Fort Collins, Colorado. Five years ago, he started studying multifamily and eventually partnered with a close friend on a 22-unit deal in Pensacola, Florida. After revisiting his goal to retire by 50, Ed realized he needed to recommit to multifamily, and in the last two years, he has leveraged the partnership model to build a portfolio of 210 units and quit his job with real estate!
On this episode of Apartment Building Investing, Ed joins me to describe how a 9-to-5 in mortgage banking inspired his real estate investing career and share his secrets to successful multifamily investing with partners. He discusses what made him the sole exception to the Law of the First Deal, explaining why there’s a four-year gap between his first and second deal and what finally inspired him to get back in the game. Listen in for Ed’s insight on the value of accountability and learn what YOU can do to stay committed to your multifamily goals.
Key TakeawaysHow Ed got into real estate
- Work in mortgage banking exposed to wealth-building potential
- Bought SFH rental every year to build portfolio of 10
What inspired Ed to pursue financial freedom with multifamily
- Never off clock, have to take calls (even on vacation)
- Rely on real estate agents + economy for livelihood
Ed’s first multifamily deal
- Friend found 22-unit in Pensacola, FL in 2015
- Bought for $740K, valued at $1.5M now
- No distributions first year (units in bad shape)
- Challenge to manage vendors from afar
Ed’s second multifamily deal
- Purchased 88-unit in Wyoming with 3 partners
- Lead from attorney handling family dispute
- Great loan from local bank, refinancing now
How Ed found his partners
- Kids go to school together
- Clients from mortgage business
Ed’s insight on building successful partnerships
- Accountability and clear division of labor
- Invest in attorney to do operating agreement
What made Ed the exception to the Law of the First Deal
- Went back to buying fourplexes
- Fell back into 9-to-5 routine
Ed’s advice around staying committed to your multifamily goals
- Write down goals and revisit every morning
- Build in accountability with mentor or coach
Ed’s latest multifamily deal
- Bought 100-unit deal in Tulsa, OK with 2 partners
- Establish relationships with local bank and realtor
- Must follow housing authority rules
What’s next for Ed
- Put 22-unit on market
- Look for deals in Oklahoma
- Learn more about syndications
Ed’s advice for aspiring multifamily investors
- Build good team
- Get educated on markets
- Get first deal done
Connect with Ed Hermsen
Email edhermsen14114@gmail.com
ResourcesPurchase the Replay of Deal Maker Live
Learn More About Michael’s Mentoring Program
Fellowship of Christian Athletes
The Ultimate Guide to Buying Apartment Buildings with Private Money