Buying a Single Family portfolio

[Christopher Haynes]

Hello BP

I have been investing in the Baltimore area buying rentals cash then rehabbing them and doing a few flips to feed my rental growth and generally cutting back to save. I have realized that its a very slow ,time consuming process and also it gives me no leverage as i am paying cash. Its such a slow way to scale so i have been looking into the multifamily space but from what i have been seeing and the people i have talked to i do not have the net worth to qualify for a loan. So i have been looking into a Single Family portfolio possibly with owner financing (i like to get creative!) Me and my business partner have somewhere between 250k to 300k and my business partner's credit score is perfect i am working on mines. Question is , does anyone have experience with or heard of any types of deals like this? I have not seen anything like it or heard of a deal like this or seen questions come up about this in the forums although i have seen some Single Family portfolios for sale. We would probably at minimum be looking for 30 units or more.  question is am i chasing something super rare? or are deals like this more common but possibly in other markets, i would love to get so feedback 

[Omar Khan]

@Christopher Haynes As @Andrew Johnson has pointed out, I don't think it will be easy qualifying for a SFR portfolio loan (on reasonable terms) if you are having issues with commercial multifamily loans.

Also, I would urge you to develop a plan, before your purchase a portfolio, on how to dispose the "dogs with fleas". Otherwise, the good SFRs will be subsidizing the dogs. You will have a hard time getting rid of the dogs (hence, my hesitation in investing in SFR portfolios) easily. They will eat into your returns unless you're partnering with a solid wholesaler/agent who can move product - fast!

In/around your market, SFR portfolios will not be generating any appreciable cash flow. You will have a higher chance of capital appreciation relative to other places where a SFR portfolio might provide ongoing income but minimal (relatively speaking) upside potential.

A financial constraint to consider is how long can you afford to be illiquid as you ramp up your operations. That is the biggest issue for non-institutional guys.