This implementation guide is based on episode 555 of the Real Estate Rookie Podcast, where Ashley shared exactly how she would start building a real estate portfolio from scratch today if she had no connections, no properties—just experience.
Define Your Investment Strategy
Start by choosing your focus. Ashley recommends duplexes, triplexes, and fourplexes for new investors. These properties offer reduced competition, attractive residential financing options, and the potential for strong returns.
Action step: Research markets and identify ideal neighborhoods where small multifamily properties align with your financial goals.
House-Hack Your First Deal
Live in one unit and rent out the others. House hacking significantly reduces your living expenses, allowing you to save more for future investments. Before proceeding, ensure you can cover the full mortgage in case of tenant vacancies.
Action step: Calculate your financial capacity to handle the entire mortgage independently to reduce risk.
Leverage Favorable Financing
Utilize financing options specifically available for primary residences, such as FHA (3.5% down), VA (0% down), the NACA loan (0% down), and conventional loans (5% down). These lower-down payment requirements maximize your available capital.
Action step: Meet with lenders to determine the best financing option for your situation and start preparing the required documents.
Opt for Cosmetic Improvements
Start your real estate journey by targeting properties needing simple, cosmetic updates rather than extensive renovations. Prioritize improvements like new paint, flooring, updated cabinetry, and minor bathroom upgrades.
Action step: Create a clear renovation plan, and vet multiple contractors. Outline your budget and timeline clearly.
Establish a Deal-Finding Process
Define your property criteria (buy box), including price, location, size, and financial metrics. Share these criteria with your real estate agent, leverage automated alerts, and explore alternative methods such as driving for dollars, direct mail, referrals, and online platforms like BiggerPockets Listings.
Action step: Set up automated MLS alerts and create a detailed spreadsheet to track potential properties and leads.
Analyze With Clear Investment Goals
Determine your primary investment objective, whether it’s cash flow, appreciation, or tax advantages. Carefully assess potential rental income, operating expenses, mortgage payments, and market trends.
Action step: Use investment calculators to run thorough analyses, stress-testing various scenarios to confirm the viability of your potential deals.
Implement Effective Property Management
Invest in property management software from day one to efficiently manage leases, collect rents, and handle maintenance requests. Consistently enforce lease terms and maintain detailed records of all interactions to protect your investment.
Action step: Choose and onboard a property management software solution immediately upon closing your first deal.
Scale Using Proven Systems
Small multifamily properties provide the benefit of scaling quickly with fewer transactions. Use equity gains from initial investments to fund future acquisitions, expanding your portfolio and increasing your cash flow efficiently.
Action step: Regularly review your portfolio performance, track equity growth, and plan your next acquisition strategically.
Final Thoughts
Want to learn more and get a detailed breakdown of Ashley’s approach? Listen to episode 555 of the Real Estate Rookie Podcast to get the full blueprint for starting your small multifamily investment journey.
The Real Estate Rookie Podcast
New to real estate investing and not sure where to get started? Join Ashley Kehr and Tony J Robinson every Monday, Wednesday, and Friday as they break down the basics with real-world deal analysis, investor interviews, and listener Q&A. Tune into the BiggerPockets Rookie Podcast to learn about real estate investing for beginners and get inspired by newbies who are making it happen.
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