Advice for an investor wanting to invest $2MM in MF in 2018

[Kusum Chanrai]

Hi everyone! 

I'd love some advice. I have $2.2 m to invest on property in the US this year. We just had twins so I need to restrict my travel. I'm based in San Francisco, and so investing locally is out. I initially wanted to buy 1 or 2 MF. I had selected 2 strong cities: San Antonio and Atlanta. Given how quickly MF valuations have been growing, the competition for MF is more fierce than ever and what I have is significantly less than most institutional investors have. I'm thinking through the following options: 

1) Join a mentorship group like Brad Sumrock's - So I can pool my funds with other individuals in order to buy larger properties. 

2) Select a much less competitive market (e.g. Saint Louis potentially) so that there is less competition. The problem here is the upside is also a risk. And secondary markets like Columbus are also pretty expensive now. 

3) Invest in SFRs for now - I haven't done this as yet, because MF seemed more efficient, and I need to restrict my travel given my new twins. 

4) Something else. 

Any advice would be MOST appreciated. Thanks!! 

[Brian Burke]

@Kusum Chanrai we’ve certainly talked enough on this that you already know most of my opinions but I’ll add this one (because we haven’t talked about it before). 

Here is the thing with strong markets. They are competitive. But that’s because everyone wants to be there. It’s easier to get a deal in a not-so-great market because there’s less competition. 

But think about this:  when you go to sell, that same competitive nature of the market that is now your nemesis becomes your best friend. 

Case in point, I recently listed one of our properties for sale, which is in a great market. We got 13 offers and are sitting about $3 million over our projected exit. 

This is what a good market can do for you. Selling in a lesser market is unlikely to script a similar story.