Discouraged... mentor said anything <500k not worth it..

[Pat Antonio]

Hey guys,

A mentor of mine said in one of his videos that investing in commercial apartments (5 units or greater) is usually not worth it if the purchase price is less than 500k. I mean, I'm sure there's a point to what he's saying but I want to know if it's possible to have a successful apartment complex business (5-50 units) for the $250-500k range? He probably means it will take more work, but is the extra work worth it? I'm still relatively young, so I may have the spirit to be able to put up with it for now.

[Don Konipol]

There are a multitude of problems with believing this blanket statement

In order for the statement to be true the following assumptions would have to be true

1. All investors value time the same way

2. All investors are in approximately the same financial situation

3. All investors have the same opportunity cost

4. All investors have the same access to financing larger amounts of debt

5. All investors have the same risk tolerance

6. All investors have the same time/risk/return level

7. All investments under $500,000 cost yield a return/time/opportunity cost ratio lower than the return/time/opportunity cost ratio requirement of all investors.

In other words, the author of this statement must assume that all investors are like him in regards to net worth, capital available, goals, risk tolerance, time availability.

A 500,000 investment probably would not be worth the time and effort to Warren Buffet, however it may well be worth it to me!