how to scale?

[Erik Moreno]

My current portfolio is about 90 doors w/ portfolio ranging from 45 unit multifamily  to single family some have long term Fannie Mae loans and others are owned free and clear. thus far its been great we allocate 14k month for living expenses but probably can be a little more. my question is how can you scale without exposing yourself with what you already have ? the bigger the property the more risks I know some ppl willl say buy right, finance right and manage correctly but the next level can come with a cost. We have put all we have plus more lots of times to get here and I'm not sure if I'm willing to do that now that I have a little one. any help or suggestions would be great

[Henry Clark]

Don’t know if you went and looked at my post.  Here is a checklist you can go down.

1.  You should have an operation annual checkup list on all of your utilities, Hvac, roofs, 

2.  Have a preventive maintenance and capex spending plan.

3.  Have funds set aside for renter turnover.

4.  Term life insurance. Buy 3 or 4 policies of $1m or $2mm each for say 15 years.   Adjust the amounts to your financial exposure and the time to your child’s graduating high school or college.  If you died you want your wife to be able to sell everything if she didn’t want to manage and take a hit, pay down the loans to reduce her financial stress, etc.  Do in multiple policies so you can drop them as your exposure reduces.   If you did a single policy you might not qualify at a later date if you wanted to downsize a single policy.

5.  Do a debt schedule.  Calculate your exposure to any refinance terms coming up.

6.  Now is a good time at your size to do a property review.  Sell any that don’t meet either your management style, cash flow or appreciation targets.

7.  Review all of your rental agreements and update as needed.

8.  Do you have a trust and not a will?   Oils you imagine owning your units.  You die.  All of your assets are in probate and your family is broke for a year and not have the funds to live or maintain the properties?      
9.  Are all of your bank accounts TOD?     

The basic premise of the steps above is to calculate/mitigate your risk.  Right now you don’t know how big the boogey man is, and don’t have control.   

When you get done with your review sit back and relax.