Multi-Family Beginner Seeking Advice!

[Marianna Osipenko]

Good Afternoon Fellow BiggerPocketeers,

Finally launching my RE investment dream 15 years after getting my undergrad in RE Finance/Investment (and then a Masters in Business). I have spent the last 15 years doing business valuations/consulting, as well as selling small/mid-size companies. I have great analytical skills, and lots of business/finance experience, but have never owned investment property before. 

I am in the Boston area, and the RE prices are through the roof (RE pun intended). I would prefer my first investment to be local, so am looking at opportunities around MA (possibly Rhode Island). Cash flow is critical, and I have about $100k ready to go, and possibly another $100k or so from family/friends. I am looking at the 10-15 unit multi-families, as it seems to take at least that many units around here to cash flow given the high prices. Challenge is, my (only) mentor is strongly suggesting I start with a smaller property (2-4 units) to gain some experience (and likely forgo cash flow). I feel that once you are managing a multi-family, the size is really not that critical. In fact, the larger properties have the cash flow to afford a PM, as well as some reserves for Cap-Ex, etc. Can you please share how you started out? Do you feel starting with a 10-15 unit is doable? Would love some advice/success stories, as my mentor is beginning to shake my confidence a bit ... Would love to connect with anyone who is willing to share their expertise, or anyone local:)) Thank you in advance! 

[Nancy DeSocio]

Hi @Marianna Osipenko,

It sounds like you have a pretty good idea of what you want, which is a great start!  I can share my experience as someone who started small (4-unit) and recently went a bit larger (9-unit).  I can understand why your mentor would guide you in that direction, especially if you are self-managing.  When you double or triple in size, you are doubling and tripling the number of tenants, and therefore, the number of issues that arise.  It can be overwhelming for some people, and testing out the waters with a smaller property has helped me figure things out along the way...but at a relatively slower pace, since I was only managing a small building and 4 tenants.  However, for the reasons you noted, going bigger right up front has it's advantages, and if you're willing to take it on and set your expectations accordingly, you can definitely do it!  Good luck on your journey!