Ep. 236: Tips for Buying Multifamily in Small Markets with Lee Yoder

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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Bullseye Tips:

 

Apparent Failure:

A flip project that consumed all of his time and forced him to get into multifamily

 

Digital Resource:

Facebook and LinkedIn

 

Most Recommended Book:

The Compound Effect by Darren Hardy

 

Daily Habit:

Getting up at 4:30 am

 

Wish I Knew When I Was Starting Out:

The impact of networking

 

Current Curiosity:

Macroeconomics

 

Best Place to Grab a Bite in Dayton, OH:

Mazunte Tacos

 

Contact Lee:

Website: www.threefoldrei.com

Email: info@threefoldrei.com

Phone: 937-400-3044