Building a multifamily real estate portfolio is fundamentally challenging.
You need to pick a market. Build relationships with brokers and vendors. Find deals. Raise money. Operate the assets successfully. And most importantly, you need to avoid making costly mistakes along the way.
Each step has its own set of challenges that can trip you up. Which means…
It takes a long time to get the metaphorical snowball rolling down the hill… and to build real momentum in the early stages of your business.
But here's what I've learned after years of doing this: when you finally feel yourself building momentum, you need to double down and press on the gas.
Most investors do the exact opposite.
Alex Hormozi, who you probably know as a pretty well-known business guy online, has a saying that captures this perfectly:
"When something begins to feel easy within your business, that's when you need to go hard."
And interestingly enough, most business owners and real estate investors do the opposite. When things finally start to get easy in their business, they take a step back. They relax. They think, "Hey, I've been working really hard. Things are finally clicking. Let me ease up a little and enjoy what I've built."
But that's a mistake.
Here's why.
In last week's email, I talked about the importance of investing with a GP who has a clear edge and the value of capitalizing on inefficiencies in the marketplace. That's where we fundamentally make the most money as real estate investors.
When I say "things get easy," I'm talking about what it feels like when you successfully identify (and capitalize on) those inefficiencies:
It could be a marketing or prospecting strategy for finding direct-to-seller deals that other investors aren’t yet utilizing, therefore making it easier for you to source deals.
It could be a relationship with an investor or lender who's eager to collaborate with you and willing to invest/lend capital at favorable terms or rates.
It could be working with a vendor or GC that needs work and is willing to renovate units at a below-market price.
It could be finding a market where pricing is broadly incorrect—where purchase prices relative to rent prices don't make sense.
Or it could be some type of operational strategy that gives you an advantage, such as leasing furnished units, adding a bedroom to units with large living rooms, etc.
Whatever it is, when you identify it, you need to lean on that inefficiency and exploit it. Because it won't be there forever, as the market always catches up.
And many real estate investors forget that.
Let me tell you a story that illustrates this.
Back in 2016 and 2017, when we started buying real estate throughout New Hampshire, it was very easy to get both notification and registered agent emails from the New Hampshire business lookup site. With those emails (which were usually from the investors who either created the LLC or served as its manager), we could reach out directly to the owners and ask whether they were interested in selling.
We had significant access to data that we just assumed would always be there.
At the time, New Hampshire was also a very inefficiently traded market. It hadn't become so popular that it attracted larger investors from Boston, New York, and other out-of-state markets… we had the benefit of a great direct-to-seller strategy combined with an inefficient market.
And we just assumed it would always be this way.
We did some deals using this strategy, but we didn't really lean on it as hard as we should have. We took it for granted. Connecting with sellers was, frankly, pretty easy.
Fast forward a few years, and that advantage started to disappear. As more investors began doing direct-to-seller marketing in this market, more owners started using dummy emails when creating LLCs. Or they'd use their attorney's email to avoid being prospected by so many other investors.
The data became less reliable. The market became more competitive. And the inefficiency we had capitalized on slowly dissipated.
If I could go back and do things differently, I would have told myself:
"Just because this is easy now doesn't mean it's always going to be easy."
And we would have really pressed on the gas and done significantly more deals at that time using that strategy in that specific market.
Here's the lesson.
If you identify a component of your business that's starting to feel easy—whether it's a marketing strategy, a market itself, or some type of operational approach to managing your assets—you should take advantage of that and put your foot on the gas.
Don't assume it will always be there. Don't relax because things are finally clicking. Double down. Do more deals. Exploit the inefficiency while it lasts. At some point, the “market” will also realize what you already know.
Because markets change. Competition increases. Inefficiencies get arbitraged away. And what felt easy six months ago can become exponentially harder if you don't capitalize on it while you have the advantage.
That's how you build real momentum when growing a multifamily portfolio. You recognize when you've found an edge, and you lean into it as hard as you possibly can.
Speaking of capitalizing on inefficiencies...
We're in the final week of funding for the NH Multifamily Fund III. This is the third and final tranche, and the capital raise closes on March 1st.
We've been deploying capital in this market for years, and we've built momentum by staying patient, selective, and focused on finding the right deals at the right prices. The strategies we've developed—the relationships we've built, the operational systems we've refined—have taken years to establish.
And right now, we're pressing on the gas.
If you've been waiting to learn more about the fund or get involved, now is the time. We're hosting a final webinar this week where we'll walk through the fund, recent activity, and what we're seeing in the market today.
The window closes in less than a week. Don't miss it.
Talk soon,
Axel