Critique my Strategy - Be Harsh

[Phil LeNeveu]

Hi Everyone - long time lurker and researcher here on BP which by the way is one of the most useful sites you can possibly use to better your REI goals.

So i have spent the last 9 to 12 months researching and learning, reading every book i can, listening to every podcast available (almost) and am starting to analyze now and plan my strategy and wanted some advice on what people on this site think.

A little about me - I am an investment Banker by trade and am very interested in pursuing solid cash flow properties.

I have set a goal for myself to acquire 4 properties by 2021 - so essentially 1 per year for the next 4 years. i often know people surpass their original goal once they catch the REI fever but figured that was a conservative goal.

I am trying to target a 13% minimum CoC returns for SFH across varying states (Indianapolis, Cleveland, KC, Nashville) - taking into account all the usual bells and whistles, ie capex (maintenance and big ticket), PM, taxes & insurance, vacancy etc. also trying to layer in excess expenses as "Misc" and still hitting returns.

I guess my question to all the well versed people on this site is - i have enough cash and reserves for continuous down payments each year to hit my goal plus some, probably could get a few additional properties thrown in there, but what do people think about slowly building up a portfolio of SFH. I would ultimately like to have 20 to 30 of them but of course starting small and using a TK model of sorts

is my Fannie Mae 10 property limit going to hurt me - is it worth it financing homes that are on the smaller side < 200K and renting out at around 1.1%

All advice and critique is appreciated and am happy to follow up with any further information that would help 

[Thomas S.]

Don't waste your time on SFHs if cash flow is your goal. They are high risk due to having only one tenant per mortgage and for the same reason have higher expenses/maintenance costs. Cash flow is generally low.

If you are serious then concentrate on the numbers. Purchase the largest multi plex units possible and expect to double or maybe triple your cash flow returns per building.

SFHs are a popular market for conservative investors interested in equity growth, which kills cash flow, and appreciation growth.

Investing in multi plex properties provides all the best options for investors.