Download the Multifamily TEAM Spreadsheet Here.

In this video, I share a tool to help you organize your efforts to build your multifamily team

Hey, this is Devin Elder and I want to walk through a tool that I’ve developed here to help you conceptualize the multi-family team. I have a lot of friends that are getting into multi-family and people that ask about this a lot. And so I created a tool to help organize what can be maybe a daunting task at the outset. But you’ve got to build your team before you go out and try to take down a multi-family property. Maybe this is your first time or maybe you’re moving from single family to a large multi-family, or small multi-family to large multi-family. This is a tool I developed to help me stay on track with the particular deal. So this is the multi-family team spreadsheet.

On this first tab you have your team. These are all the team members; SEC attorney. If you’re raising capital and you’re going to have a PPM, or a Private Placement Memorandum prepared, they’re going to do that for you. You’ve got your LLC attorney to help you format, or create rather, your LLCs for the new property. You’ve got your property management company. You may have a construction management company or someone to manage any of the construction management. That might be a general contractor or it might be the property management company, but somebody in charge of managing the renovation on your property. You got due diligence. You’re going to have somebody at the outset when you first put a property under contract to help you evaluate, physically inspect that property. So things like scoping the sewer lines to check for cracks or roots or bellies. Things like having the HVAC systems evaluated, having the roofs checked, having a structural engineer check for any foundation issues or other building hazards. You’re going to have a general contractor walk units and give you bids to renovate units.

So I recommend putting a team together on the front end and there’s companies that will specialize and do this. You might have to pay them a few thousand dollars, but obviously if you’re talking about a multi-million dollar asset, that is money well spent. Then you got your lender, you’ve got your broker, and you’ve got insurance. Now I’m assuming a syndication here. If you’re not raising money, you may or may not need key principals, but a key principal is someone that’s going to help you with balance sheet requirements that the lenders like to see. So you might bring on somebody with a large balance sheet to help you qualify for that loan, you might even bring two people on depending on the project.

And then you’ve got your equity. So let’s say you’re raising two million dollars for a project and you’re able to raise a million of that, but you’re going to need to bring somebody on to raise the rest of it. So you might have another general partner or you might have a lot. So in this example, we’ve got equity needed of 2.5 million, and so as we bring on equity partners, maybe somebody’s going to bring 500,000, our gap, what we need for equity, shrinks.

Now this is the list, but what I like about this spreadsheet is this is a master database for you. So you’re going to go in before you ever entertain the idea of buying a property, you’re going to go in and start building relationships with brokers, lenders, equity, key principals, SEC attorneys, LLC attorneys, property management, insurance agencies, company for due diligence, and a company for construction management. So a lot of different players on the team there, but what you can do is you could start to fill these out. And let’s say for brokers, I’ve talked with 10 brokers, I’ve taken them out to coffee, I did happy hours, played golf, whatever it is to develop relationships with brokers. Well now that you’ve got their contact information and notes and everything in your brokers tab, you can go back to your team and it’s going to pull from that data. So yeah, on this deal I’m talking with this broker and we’re getting the thing done.

So this team tab is your master look at the single deal so you’re not trying to wrangle 100 different contacts. Same thing with lenders. You’ve got one lender. You want to build relationships with a couple of lenders. Maybe not nine, but a couple. And then you can go back to your team sheet here and say, “What lender is looking good on this project?”. And same thing all the way down. Let’s say your equity partners, you’re going to develop a number of equity partners, people that will partner with you and be able to raise capital for this deal. And as you go back to your team, you can go to your equity partners and say, “Okay. Equity partner one is good for a million dollars. Equity partner two is good for 500,000.” And it just helps you summarize where this deal is in one shot based on your … Without having to wrangle your entire 100 person database, or whatever it is.

Now, I’m a fan of quality over quantity. So you don’t necessarily need 10 broker relationships. Maybe you just need one good one, but you might have to kiss some frogs to get there. Same thing with lenders. You don’t need nine lenders chasing you around and trying to compare terms. Maybe you’ve got one lender referral from a trusted friend. A rule of thumb on any kind of vendor is to get three bids, and that sort of applies here too. So if you can be talking to three banks if you don’t have a relationship already. Or if you can be talking to three brokers and develop a relationship there.

So this is the sheet that I use to keep track of the project and this just pulls in all of your contacts. So your goal, I guess, if you’re new to this or you’re new to taking out a larger multi-family project, is to start developing these relationships. And these are obviously long term mutually beneficial relationships, so you’re going to want to play the long game here. This is not highly transactional in the way that single family business is, so build those relationships with those brokers. Build the relationships with the lenders, build relationships with equity partners etc. and keep them all here so that when you actually have a deal and things start moving very quickly, you’re able to just go and say, “Who is the team member for this project?”

So I hope that helps you conceptualize how you want to build your team, and I want to stress that you want to build those relationships before you ever go start to look for an actual deal to take down.

Thank you.