Your first $50k: SFR rental or LP in a syndication?

[Jon Schwartz]

Hi everybody,

Newbie here!

My wife and I are in our mid-30s and have careers we love, so I see REI as a way to diversify our investment portfolio and create passive income. I envision myself buying a turnkey SFR rental or two, then getting involved with syndication as an LP, and then perhaps pursuing deals as a GP further down the road. (My line of work is somewhat ageist, and it's likely that my career will begin to wind down 10 or 20 years before I'd otherwise choose to retire. Many of colleagues go into teaching at this point; I'm laying the groundwork for a late-in-life career in REI.)

Lately I've been wondering: should I skip the SFR rental part of the plan?

On the one hand, I want the nuts-and-bolts experience of buying and owning my own rental: researching markets, underwriting deals, dealing with the cap ex and headaches, etc. I'd hire property management, so my involvement would be thereby limited, and my cashflow would be reduced. I'm most interested in the experience (provided I don't lose my shirt and there's the promise of long-term capital gains). My family is financially stable and in no rush, so why not add this notch to my tool belt

On the other hand, why put up with the hassle of a SFR rental when I feel syndication is the better long-term strategy? I could devote these next few months to networking with GPs, reviewing deals, getting experience with due diligence, etc., in the syndication world -- and then dive right into the niche that I see as the better long-term strategy. We're accredited, so we don't have that obstacle to deal with.

To SFR or not to SFR, that is the question. Any opinions would be appreciated. Thanks so much!