Financial Freedom with Real Estate Investing MB286: The Rocky Transition from Flips to Multifamily – With J Scott
You might think it would be easy for a well-known flipper to transition to multifamily. But the truth is, a successful career in single-family does NOT translate to the world of apartment building investing.
So, how do you make the leap from single-family rentals and flips to multifamily investor?
J Scott serves as Partner at Bar Down Investments, a multifamily investing firm with a portfolio of 1,000 units. J got his start in single-family real estate and built a reputation in the flipping business, rehabbing 500 properties and authoring four bestselling books in the BiggerPockets library. And then 18 months ago, J made the transition to multifamily investing.
On this episode of the podcast, J joins cohost Garrett Lynch and me to share what inspired his move into multifamily and explain why flipping houses is not the path to financial freedom. He opens up about lacking credibility in the multifamily space, offering insight on how to get brokers to trust you if you’re new to the game. Listen in to understand the 3 things you need to get investors to work with you and learn how to build a reputation in the multifamily space—with or without prior real estate experience!
Key TakeawaysHow J got into the real estate space
- Work long hours as corporate engineer in tech space
- Shift to real estate in 2008 to 'put family first'
What inspired J’s transition to multifamily
- Burned out on flips and single-family rentals
- Had cash to invest but didn’t trust anyone else
Why flipping houses is not the path to financial freedom
- Transactional (trade time for money)
- Need passive income stream
Why it took J so long to make the shift to multifamily
- Ego (reputation as ‘flip guy’)
- No credibility in multifamily space
What J did to compensate for his lack of credibility
- Admit had to start over, build new relationships
- Find mentor and add value
How to get brokers to trust you if you’re new to multifamily
- Partner with someone who has track record
- Prove serious by underwriting and giving feedback
J’s advice for investors considering a shift to multifamily
- Build marketing machine for 6 months first
- Multifamily scales much better
The benefit of having single-family experience
- Learn mechanics of deal with less money at risk
- Skills of acquisitions, underwriting, raising money
The 3 things you need to get an investor to work with you
- Build relationship so they LIKE and TRUST you
- Make them NEED you (e.g.: retirement plan)
How to differentiate yourself from bigger operators
- Do what you’re good at, educate new investors
- Tap into personal network
Connect with J Scott Resources
Join the Nighthawk Equity Investor Club
Learn More About Michael’s Mentoring Program
Access Michael’s Blueprint to Your First Multifamily Deal Training
Financial Freedom with Real Estate Investing by Michael Blank
Rich Dad Poor Dad by Robert T. Kiyosaki
How to Win Friends & Influence People by Dale Carnegie