Investors are looking for better yield, which is just the annual return on their investments. To find better returns, multifamily investors often look into different markets that are less competitive. This can leave some investors being priced out of hot markets and looking more into secondary markets, tertiary markets, and small towns. However, for Lee Yoder, he just looked in his backyard to find multifamily opportunities in less competitive submarkets that were further away from the core metropolitan market. Lee was able to raise money on his first apartment deal in a small market and shares how he raised capital as a new apartment investor.
Lee was practicing as a physical therapist when he realized his true passion was building his own business and investing in real estate. He has taken this passion and considerable action to quickly build a portfolio with several small apartment buildings. Lee is the founder behind Threefold Real Estate Investing, and he’s committed to forging a path that will generate incredible wealth and opportunity for all involved.
Lee shares his biggest insights learned on investing in smaller markets, including understanding the employer base, access to the primary market, and other market drivers. He highlights the biggest concerns of investing in a tertiary market and how he determined that a deal that had been left to die was worth resuscitating. He also details how he built a strong team to attract investors from his network for his first apartment deal.
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Key Insights on Multifamily Investing in Small Towns and Tertiary Markets
Lee started as a physical therapist when he looked for more flexibility
Transitioned to become a home health physical therapy
Moved to corporate, but wasn’t fulfilled so he went back to home health and started investing in real estate
Flipping properties required a lot of his time, so he decided to transition to multifamily
There are some busy weeks, but it’s nowhere close to the corporate space
Located in Lebanon, OH between Cincinnati and Dayton
Found single-family flipping deals at the auction
In a small town, you have to ask, where are my residents going to work?
How to adjust underwriting for being outside of core MSA
Investing outside of Dayton in Spring Valley, Xenia, Beavercreek, Franklin, Middletown, and Wilmington
How DHL’s departure from Wilmington airport impacted the local economy
Amazon’s huge $1.5 billion development in Florence, near CVG Airport
How he transitioned from single-family into multifamily
Joined Cincinnati REIA and got a mentor that helped him
Maybe it looks like a good deal because no one else wants it.
Brought in a property manager before when analyzing deals
Acquired a 16-unit that was an old school building converted into an apartment complex
Wrote an offer for his second deal on the day he was closing on the first deal
Identified a great lender and built an excellent team as he did more deals
How he got three multifamily deals in about 90 days
Learn how Lee how raised money for his first apartment building
Inspiration for launching a podcast and growing Threefold REI
And if one prevail against him, two shall withstand him; and a threefold cord is not quickly broken. (Ecclesiastes 4:12)
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Flip project that consumed all of his time and forced him to get into multifamily
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Most Recommended Book:
The Compound Effect by Darren Hardy
Getting up at 4:30 am
Wish I Knew When I Was Starting Out:
The impact of networking
Current Curiosity: Macroeconomics
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Website: Threefold REI