DONT BE STUCK IN SINGLE FAMILY HOMES FOREVER

[Jason Malabute]

Most big time investors tell you to skip SFH and jump straight to multi -units. If you have the stomach to invest at least $100k in your first real estate deal without any knowledge and extensive knowledge then go ahead. You're better than me. Even if I had a trusted mentor, it's difficult for me to trust him. with hundreds of thousands of dollars without me knowing what's going on.

On the other hand , I suggest new investors to first start with SFH. SFH will teach you the basics of real estate. It will teach you the acquisition, due diligence , rehab, marketing, and refinance process. It will teach you how to manage your team and how to respond to tenant requests .

However, the secret is not to be comfortable being content staying in SFH.

I have had so many experiences with SFHs. I've had everything from flooding to burglary. SFH only has one income stream. So when something happens like a water heater leaking or burglary you will pay out of pocket if the rent is not enough to cover the expense.

However, in apartments if a major expense happens in one unit you have 20 other units to cover the expense and put cash flow in your pocket.

Some investors value equity over cash flow. They argue "I love SFH because the equity grows faster than equity of apartments. I think this so silly. I have one question for those thinking like this. Can I buy food with equity before I sell the property? Yes or no?... OK then .

[Mike Dymski]

Both are profitable strategies...just depends on your goals.  I started with singles and small multi's but that was not going to work long-term.  It would have taken me an eternity to source 30 SFRs; so, I bought a 30 unit community instead.  Also, sourcing and managing 30+ individual properties is the polar opposite of my goal for more control and freedom.

Managing one 30 unit property is exponentially easier than 30 individual properties but it still comes with it's management challenges.  Going larger and having on-site management and maintenance and commercial vendors is the most effective solution.

Regarding the vacancy and major expense argument, that one does not hold water.  Having 100 SFRs vs 100 units in an apartment community both provide insulation from vacancy and major expenses in one or a handful of doors.  It's the benefit of scale in either strategy.