Buying a multi family apartment deal

[Jesus Orbea]

Rookie investor here. I am 34 years old with 3 little girls. No debt besides my mortgage and the mortgages of my two rentals. I own 2 single families already that I rent out and have saved the last few years to invest in a larger deal.

I have explored single family turnkey with Spartan Invest and MidSouth Home Buyers and that route seems decent. However, the more I read and listen I believe that my strategy wants to be to invest in a 16+ unit apartment complex.

I have the cash for the down payment and asking BP if you were 34 again and had the opportunity to buy a larger deal or buy multiple smaller deals (100-120k SFH turn key deals) what would you do?

My goal is buy and hold. Any advice here would be much appreciated. Thank you.

[Chris Levarek]

@Jesus Orbea A great question! This one is asked actually quite frequently and typically the answer from experienced investors is go for the bigger deal. As many have pointed out already, there are some great economies of scale and benefits with larger deals.

However! Most if not all those experienced investors started in the same place. It is the rarity that a new investor jumps into a 50 unit and runs the project without some help. Just doesn't happen. Now a new investor can passively invest into large 50+ units and gain knowledge/experience definitely. But, actively running the project usually requires some ramp up and a mindset shift. 

The only reason I say this, is because although it will be recommended to go large, it is the growth on smaller deals and/or passive investments that creates the mindset shift. That mindset shift that you can knock down bigger and better. 

Momentum builds and all of the sudden YOU are telling new investors they should go big first as you see the benefits. This has been my experience. It does not mean it has to be yours however, I thought I would share my take on it.

You might be able to swing a 50+ unit out of the gate! 

Either way consistent action and networking relationships will get you there. Reach out if I can help.