My transition from SFR rentals to Multifamily Investing

My transition from SFR rentals to Multifamily Investing

Arn CenedellaPro Member
Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes

One of my core values is that my words match my actions.

In street vernacular, one could phrase this as “practice what you preach” or “put your money where your mouth is” or “if you talk the talk, you need to walk the walk”.

I have invested in single family homes and smaller 2 to 4 unit properties since 1980 - forty years - a lifetime - and have done well with these investments.

This year as COVID hit America, I had a conversation with a young investor buddy of mine about Covid’s impact on rent, the conversation led to a podcast recommendation about Covid impact on multifamily investing.

The light bulb went off - in TV talk show language, one could say I had an epiphany.

And my journey and transition to multifamily investing started. I know I am a little slow to catch on, but hey better late than never. 😀

From that point on, I sold a couple of my single family rentals and have now invested in 6 multifamily syndications as an LP and am in the process of completing my first multifamily syndication as a GP.

See for me.......before I could ask people to invest with me as a GP, I had to first invest as an LP. I had to walk the walk before I could talk the talk. I couldn’t in good conscience ask people to do something I had not done.

In a short time, I have created a diversified portfolio of MF investments in some of the nation’s best markets - Charlotte, Greenville SC , Columbia SC, Boise, Colorado Springs, and Augusta GA. These investments are spread across A B and C asset classes. So I have geographic diversity as well as Apartment Class diversity.

I now have invested in over 1000 units.

So I would encourage smaller mom and pop investors like I was or busy W2 professionals who know investing in real estate is a good thing but don’t have the time or knowledge to invest - educate yourself about passive MF syndication investments, see if they are a good fit for you and if so, create a plan and execute it.


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AJ ShepardPro Member
Real Estate Syndicator · Portland, OR · Member since 2014 · 453 posts · 312 votes
5y

@Arn Cenedella

Would be great to get on the golf course sometime!

Great post and very inspirational for those not in the game to find a way. We, much like you started out in SFH and 2-4 units. It's a great way to start to get a taste of it, but working in getting more MF units is certainly a lot more passive and great when you're working for the man. Great to hear your story!

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  • Danny RandazzoPro Member
    Apartment Syndicator · Charleston, SC · Member since 2016 · 973 posts · 728 votes
    5y

    @Arn Cenedella great insights. Congrats on making the shift to other multifamily

  • Rental Property Investor · Anderson, SC · Member since 2020 · 38 posts · 12 votes
    5y

    That is incredible and inspirational. You stepped forward to something new - syndication. Educating and putting your full attention and compassion into one goal will eventually pay off. You weren't stuck in analysis paralysis, instead, you believed in yourself and fulfilled your core value of matching your words with your actions. Outstanding. Congrats on your transition and I am sure you've got plenty more deals to do! I may be new to the game, but I've got the fire and gut to reach my RE empire.

    Blessings,

    Sosa

  • Arn CenedellaPro Member
    OP
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y

    @Jesus Sosa

    Thank you. Yep excited to learn a new aspect of REI.

    Life is long and one needs to keep growing and learning.

  • Arn CenedellaPro Member
    OP
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y

    @Danny Randazzo

    My first LP investment was with Dan Brandon and you - so you all helped me with this transition. 🙏

    Arn

  • Robert SmithPro Member
    San Francisco, CA · Member since 2020 · 10 posts · 6 votes
    5y

    This is a great post @Arn Cenedella. I'm interested in multi-family as well, how did you find good deals to join as an LP? Right now I'm just not sure where to even begin looking.

  • Arn CenedellaPro Member
    OP
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y

    @Robert Smith

    I lived most of my life on the SF Peninsula but moved to Greenville SC 6 years ago. 

    Let’s connect and then we can talk off line. 

    Arn

  • Investor · Member since 2018 · 24 posts · 2 votes
    5y

    @Arn Cenedella

    Congrats! I’m looking for my first multifamily acquisition right now (5-20 units).

    Can you clarify the time frame in which you invested in these MF deals?

  • Arn CenedellaPro Member
    OP
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y

    @Sam Abraham

    All in 2020 May thru December. 

  • Investor · Glen Mills, PA · Member since 2019 · 185 posts · 208 votes
    5y

    Congratulations, Arn! Wish you the best of success. Let’s connect as we share similar interests. :)

  • Richard RozoPro Member
    Investor · New York, NY · Member since 2017 · 14 posts · 6 votes
    5y

    @Arn Cenedella

    Great post and congratulations on all your success and the transition. I am looking to invest in the multi family space as well. What would you recommend someone who is not an accredited investor do since usually becoming an LP is not an option without that status?

  • Arn CenedellaPro Member
    OP
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y

    @Richard Rozo

    There are 506b investments that do not require accreditation. That being said these are long term investments and ONLY suitable for individuals who fully understand the risk and who fully understand their money is locked up for 5 to 7 years. So accreditation or not, I would only recommend LP investments for people who are in solid financial condition with lots of cash in the bank - at least a 6 month rainy day fund if not more. Also the financial sophistication to understand these investments. So not for everybody. 

  • Richard RozoPro Member
    Investor · New York, NY · Member since 2017 · 14 posts · 6 votes
    5y

    @Arn Cenedella

    Right. Yes, I will look more into the 506 (b) route. Thanks!

  • Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
    5y

    @Arn Cenedella thanks for sharing. Was there a minimum investment amount for each syndication you participated in?

  • Arn CenedellaPro Member
    OP
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y

    @Jaquetta T Ragland

    Generally $50,000. 

    Occasionally, syndications can be found with a minimum $25,000 investment. 

    I would caution all, syndications are long term 5 to 10 year hold periods.

    Folks should ONLY invest in syndications if they are in a position where they are sure they won’t need that cash for many years. 

    Most financial advisors advise people have at least 6 months of living expenses saved for a rainy day. So I would say one needs that AT A MINIMUM and then have additional cash before investing in a syndication. 

    The other good option is to use ITA funds to invest in syndications. By definition, IRA money is money locked away until at least age 59.5 years I believe. So that's long term investment money and that may be suitable for many.

    Happy to help. 

  • Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
    5y

    Thank you so much ☺️ 

  • Rental Property Investor · Broomfield, CO · Member since 2017 · 64 posts · 40 votes
    5y

    @Arn Cenedella

    An inspiring post. I just closed a 4-plex in Colorado Springs and have few single family rentals there. Let me know if I can do anything. I can source deals, fix them up and participate in cash investment.

  • Arn CenedellaPro Member
    OP
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y

    @Thomas Wang

    I am closing a deal in Colorado Springs later this month - great market.

    Let’s connect off line and set up a chat.

  • Investor · Greenville, SC · Member since 2013 · 85 posts · 17 votes
    5y

    Good stuff @Arn!

  • Member since 2020 · 11 posts · 3 votes
    5y

    Thanks Arn. I am looking at syndications now as an LP so would really appreciate any insights on sourcing the deals.
    Will drop you a direct line

  • Arn CenedellaPro Member
    OP
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y
  • Danny RandazzoPro Member
    Apartment Syndicator · Charleston, SC · Member since 2016 · 973 posts · 728 votes
    5y

    @Arn Cenedella we love hearing that! @Dan Handford @Brandon Abbott

  • Arn CenedellaPro Member
    OP
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y

    @Danny Randazzo 

    I had the pleasure of sharing a burger with Dan and Brandon when they came to Greenville one time.

    I understand you are an avid golfer, we will have to play if you ever have time.

  • Rental Property Investor · Dillsburg, PA · Member since 2020 · 24 posts · 14 votes
    5y

    I like this advice.  I went from owning one single family townhouse to investing in as an LP in a syndication to being a GP in a multi-family 52 unit apartment complex (still underway) all this year.  Exciting!

  • AJ ShepardPro Member
    Real Estate Syndicator · Portland, OR · Member since 2014 · 453 posts · 312 votes
    5y

    @Arn Cenedella

    Would be great to get on the golf course sometime!

    Great post and very inspirational for those not in the game to find a way. We, much like you started out in SFH and 2-4 units. It's a great way to start to get a taste of it, but working in getting more MF units is certainly a lot more passive and great when you're working for the man. Great to hear your story!

  • Real Estate Agent · Colorado Springs, CO · Member since 2019 · 124 posts · 127 votes
    5y

    @Arn Cenedella What was your driving factor in investing in Colorado Springs as opposed to a cheaper market? I'm local to the Springs and invest here, but I've recently been considering beginning to look out of state due to the high prices and low inventory in the MF space. 

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