Question on Building a Small SFR Portfolio

[Hakob G.]

I was hoping some of the more experienced investors would shed some light on the risks and benefits of buying 5-6 units in the same city.

What are some of the benefits from having scale in one city? Are you able to negotiate better terms with your property managers if you have 6 units in the same city?

Alternatively, isn't it better to diversify and purchase 1 or 2 units in 3 different cities to reduce risk in case there is an economic downturn in one city, or no property value appreciation?

Just wanted to see how the rest of you have thought about these issues. Also, please list any other key benefits or risk I'm missing.

Thank you!