Multifamily … Forever Cash Flow?

All roads lead to multi-family. It seems that no matter how you get your start in real estate, the vast majority of investors come to the same conclusion: For passive, everlasting cashflow, multi-family is the way to go.

Jack Bosch came to the United States from Germany in 1997 to finish his college degree. He worked in the corporate world for several years, but soon found that it did not afford the life he wanted. His visa was dependent upon keeping his job, yet the company that was struggling, so Jack was inspired to start a company of his own.

Attracted to real estate because of its cash flow potential, Jack got his start flipping land. Over the course of three years, he developed a system that allowed him to do 3,800-plus deals, and he achieved financial freedom in a short time. Jack eventually moved into the single-family space, developing a portfolio of rental properties, and he finally graduated to multi-family in the last year. Today he shares the specifics of his transition to multi-family, his experience raising money for the first time, and his advice for investors who dismiss apartment buildings as an advanced strategy. Listen as he explains why he would have liked to get into multi-family sooner, and how you can get started in the space with no prior experience.

Jack Bosch – Key Takeaways

[2:12] How Jack got involved in real estate

Constant travel for work
Only two weeks’ vacation
Not the life he wanted to live
Company struggling, many lost jobs
Visa dependent on employment
Desire to start own business
Real estate appealed because of cashflow

[4:00] Jack’s start in flipping land

Could sell land for seller financing
Generate long-lasting passive cashflow

[5:36] How Jack defines a transaction

One-time cash deals (flip house, get paid once)
Temporary cash (give loan, receive interest)
Monthly payments (flip land for seller financing, receive down payment + monthly installments for six to eight years until paid off)
Forever cash (passive, everlasting income via multi-family)

[8:47] Jack’s transition to multi-family

Began working real estate in 2002
As of 2009, still hadn’t touched rental properties (thought too complicated)
Discovered houses available for $50/ft²
Purchased several dozen, rehabbed and managed themselves
Made mistakes (bad tenants, spent too much on rehabs)
Eventually found good property managers
Learned to systematize
Still not hassle-free (deal with one property at a time)
Realized multi-family properties provide buffer

[12:52] Jack’s advice around the multi-family learning curve

Acquisition, sourcing, negotiation, analysis and management processes are different
Look for a partner-expert to learn from
Jack did first deal on 93-unit in Louisiana with experienced friend
Experience was ‘hands-on MBA in multi-family’
Now building own team, additional funding sources
Still works with partner on bigger projects
Looking to build out own portfolio as well

[18:10] Jack’s experience with raising money

First time on multi-family deal
Benefitted from having reputation in market
$1.4M raised in short time
Felt responsibility as steward for someone else’s money

[21:01] Jack’s conclusions about multi-family

At top of favorite investment methods list
Securing good property management company is key
Low risk, high reward (extremely safe investment)
93-unit property has doubled in value
Recession-proof (extraordinarily low default rate)

[22:48] Why Jack would have liked to start multi-family sooner

Cashflow would have been multi-fold higher
Single-family experience did teach building, rehab
Could have gone right to multi-family with proper guidance
Employee mindset, thinking small held him back
Success with early investments helped grow thinking
Systems in place to make business scalable
Some aspects of multi-family are easier than single-family

[28:20] Jack’s advice for investors who dismiss multi-family as an advanced strategy

Shadow a coach/mentor
Mentor acts as ‘time compressor’
Help with mental hurdles, analyzing numbers

[30:26] What Jack is excited about

Cashflow affords family opportunity to travel (Trips planned to Europe, Asia, Germany, South America)
Business continues while they travel
Looking to secure 5,000 units in five years
Transform lives of investors (up to 16% yearly average returns)