Slow and Steady or Fast and Big

[Richard Talbott]

Is it a better strategy to sell my SFRs in order to finance 20+ unit properties, or to slowly build a portfolio before making the big jump to large multifamily properties?

Hello everyone,

I have a SFR that is completely paid off and I now have a great tenant. I have been looking high and low for another good rental property but have been contemplating if I should focus on multi-family properties. My initial plan was to acquire five SFR and get pay them off. At that point I would focus on getting into multifamily, specifically 20 units or more. At this point, should I run into problems with the large multi-family unit the income from my SFRs could cover the difference. Therefore, I would not be putting myself in a position where I'm risking my personal financing and the potential go bankrupt. However, I watch podcasts, such as Grant Cardone, and have read a few other articles that suggest I should sell my SFR and go directly for the 20+ unit properties. What do some of you more experienced investors believe to be the better strategy? After looking at nearly 100 deals and having made a few offers, which were not accepted, I've come to the realization that even if I were to get an extraordinary deal on a SFR I will be hard pressed to make even an 8% return. There are a few "fairly secure" stocks out there that pay 6.8% dividends which is making me a little discouraged in the SFR realm. Keep in mind I have a full-time job and do not intend to manage properties personally. Thank you in advance for any advice/comments. Have a great day