Long Distance MF Scaling advice needed

[Gabriel Miritello]

I have 3 SFH rentals and have completed 2 flips that I have purchased or completed full renos on, while being a long distance investor. I have a good SFH system in place in the area that I have completed all my home projects.

 My real estate goal is when I can retire from the military in 4.5 years, I want to cash flow plus pension to do what I want to do, without fear of finding "work". I like my SFHs but am interested in the 2-10 MF doors space.

My question: I think I am ready to scale up to multifamily but feel the MLS listings do not cash flow. How have you/did you scaled up into long distance multifamily real estate? Finding deals? Manage?

Thanks,

Gabe

[Denver McClure]

Hey Gabe, glad to see a fellow vet investing in RE! Yes, many of the MLS listed multifamilies aren't cash flowing well right now, mainly due to financing. Keep in mind that you'll most likely refinance to a lower rate within the 4.5 year span before retirement. I recommend running the numbers at today's interest rates, then run a second report with a hypothetical interest rate of 4% in 4 years. To be clear, nobody can predict where interest rates will be at in the future so there is no guarantee 4% is where you'll refinance at. That second report will simply be a benchmark for what the property could do in the future, assuming standard appreciation rates in rents, expenses, and property value. A 1031 might be a great avenue for you as well if you want to trade up the SFHs into MF when the opportunity presents itself.

Feel free to reach out if you'd like to chat sometime.