Jumping in around 10 units--plausible?

[Cody Warhurst]

I'm located in PA, sitting on a bunch of cash, and looking to jump right into multifamily real estate to begin the process over the next several years of replacing my w-2 income and gaining more license over my future than corporate America is willing to give me on its own.

I hate to act like I know a damn thing and I likely don't, but I have at least been attempting to get an education on multifamily REI by reading books, lurking REI forums, listening to podcasts, talking to others I know that have owned and operated multifamily bldgs, etc., and I can confidently say I am committed to doing this.

Growing up, my parents operated about 20 student apts and half a dozen townhomes, so I'm not unfamiliar with multifamily and I at least have people very close to me that know the ins and outs of running commercial, granted they've been out of the game for a decade. 

The plan is to acquire 10-20 class b LTR units in 2024, value add, raise rents accordingly, and hold. Long term plan is 50-100 units. 

So my goal is replace my w2 income and objective 1 is cashflow (not the negative kind!). I plan on have a property manager from day 0.

Every post I see on mf REI is inevitably full of "house hack a duplex or 4plex" advice. The problem is I don't want to do that, i have a home and I don't want to just get my feet wet, I want to jump in.

So my questions are...

did anyone else start their REI journey with a small multifamily greater than a 4plex?

How did it go and what did you wish you did differently?

And of course, how terrible is my plan? :)

[Mike Dymski]

Yes and owning ten units in the same location is much easier than owning ten units throughout the city. If you buy a property at a price that is based on the current rents and then are able to raise rents and add value, you de-risk the acquisition substantially by walking in with built in equity (and can make a bunch of other mistakes because your added value covers you). I went from two flips and a four-plex to a 30-unit community and the 30-unit is by far easier than the other stuff. One challenge...10-50 unit properties are a bit in no-mans land when it comes to management. Too big for an SFR management company and too small for the professional multifamily management companies. Management inefficiencies suck but if you add enough value, if makes up for it.