How To Get Your Offer Accepted without Experience or Proof of Funds

One of the main objections people have to getting started with apartment building investing is that they don’t have the necessary experience. They think they need years of single-family house investing first before they can “graduate” to multifamily.

When I had my first apartment building under contract, I had flipped over thirty houses. Even though the idea of buying a 12-unit building made me break out into a cold sweat at the time, I felt like I had a pretty good track record with real estate.

But when I spoke with brokers and investors, they still quizzed me about my multifamily investing experience. When I shared that this would be my first one but had flipped over thirty houses, they weren’t impressed with my track record. It was as if I got absolutely no credit for my house flipping experience.

I got a similar reaction from commercial real estate brokers and other professionals I spoke to. They, too, gave me little credit for my single-family house investing and immediately honed in on my lack of multifamily investing track record.

I was stunned. I thought for sure my experience investing in single-family houses would set me up for multifamily investing, but it didn’t. I think it’s because in people’s minds, single-family house investing is a completely different animal from multifamily.

I remember when I first started calling brokers in Texas 먹튀검증사이트. I had barely said a few words when the broker would ask me to send him a Proof of Funds along with my apartment investing resume. That usually ended the conversation, and the broker never returned another phone call.

Here’s what I would say to a broker:

“Hi, my name is Michael, and I’m interested in purchasing multiunit properties around $1M with at least a 10% return. Can you send me some deals?”

It took me a while to figure out what was going on because I didn’t know any better. I was making several mistakes that kept me from getting in the game.

The answer wasn’t that I needed more experience. I needed to prove my credibility.

To teach you this second secret of how to get your offer accepted without experience or Proof of Funds, I need to show you how to avoid the common mistakes I fell into. I’m going to give you four tips to overcoming these mistakes so you will be taken seriously, even if you don’t have any real estate experience.

Tip #1: Educate Yourself So You Don’t Sound Like a Newbie

There’s specific language that commercial real estate insiders use. Apparently, I wasn’t using the right terms (or wasn’t using them in the right way), and others immediately classified me as a newbie. The best way to avoid this mistake is to educate yourself. You must use the right language when you speak to other professionals, and you only have one chance to make a first impression. So if you call a broker and sound like a newbie, it will be difficult for you to convince him or her of your credibility.

You know you sound like a newbie when you get these questions from the broker:

“The seller wants to see your Proof of Funds before I can send you the financials.”
“What multifamily experience do you have?”

Since I wasn’t using the right language in my script when calling brokers, I wasn’t proactively addressing the main concern every broker has when a new investor calls in: Would I be able close? Meaning, did I have the money and necessary experience? When I cold-called those brokers on the phone, that’s what was going through their heads. They were trying to figure out if they should take me seriously or if I was wasting their time.
Here’s a sample script that will keep you from sounding inexperienced:

“I work with a group of high net worth individuals, and we would like to expand into the Atlanta market. We already have property management company XYZ on board and are continuing to build our team. We’re looking for deals in the $1M to $2.5M range with at least an 8% cap rate and are looking for stable value-add deals but no repositions. Is there anything you have in your pipeline that you can send over for me to review?”

Here’s what you’ve done:

You addressed the money part by saying you’re working with high net worth individuals.

You addressed the experience part because you’re working with a property management company and say you’re “expanding,” implying that you already have experience.

You’re using terms like cap rate, stable value-add, and reposition, which only commercial real estate insiders would use.

Do you see how a simple script change can make a huge difference? That’s just one example of how education can pay off big for you.

So make sure you educate yourself! There is a lot of free material to get you started, but if you’re serious, you’re going to have to invest in your education. Here are some suggestions and resources to get you started:

You can find a lot of free material.

For example, all of my articles, videos, and podcasts on www.toto-good.com