20-50 unit apt building or flip

[Michael Siladi]

Hello BPers, long time reader, first time poster. I currently own 12 Apt’s in Fairfield county CT and about to sign contracts on 10 of mine to sell. Looking into doing a 1031 to defer taxes. My question for y’all: is it too risky to put all profit in one building (20-40 unit or whatever I can afford). Probably somewhere in the ballpark of a $4mm property. If I split it and buy a flip house and a multi family I end up paying taxes since single family houses don’t count for 1031.

One last question— if I’m looking into a property between $3mm-$4mm how much is a good cushion to have for reserves? I would most likely sub out management. I’m a builder in the area I live and depending on how far the property is, my time is better spent making money than managing 40 units.

I’ve had good luck with my 12 units and trying to learn as much as possible for a larger apartment building investment.

All advice and information is greatly appreciated! Happy Friday!

Michael