Single Family Residences for Buy and Hold.

[Jonathan Farris]

Why would anyone B&H on a SFR? Is it like... the end result of a BRRRR?

It just doesn't make any sense to me. SFR, I think flip. MFU I think B&H.

Obviously every deal is unique, so this is not as simple as stated.

If I am B&H I want the biggest building with the most rents I can afford.

The "why?" is simple: Repairs, Maintenance, Drive Time, Synergy, Closing Costs

I am in the process of buying an 11 unit building. If I bought 11 individual units (or even a few different 3 or 4s) I would pay 3 to 11 times the closing costs. I would have 3 to 11 buildings to maintain instead of 1. I would have to drive to the various locations to fix things, and do rent collections/evictions/etc. With bigger buildings, you typically have some kind of set layout, instead of all these cut up 1/2/3/4/5 units, decreasing repair costs/time.  

Also, occupancy on SFR is 0% or 100%, where you have middle ground on MFU's.

Obviously I am not enamored with the idea of paying 8-10% of rents to a PM, so maybe these guys are just pay someone to do it? Wouldn't that eat up all (if not more) of cash flow?

I also get that buying a bigger complex is more cash intensive, but if you are going to B&H, I think starting with SFR is a mistake!

Let me know how you feel!