Is 4 homes enough??

[Jake Andronico]

I currently have two house-hacks that I've moved out of and are now full time rentals that cash flow roughly $800-1K per month each. 

When I started straight out of college, I used to think that I NEEDED 10 houses in 10 years or I was doing something wrong. 

When I didn't get there, I felt internally inferior, sad, angry, and somewhat depressed....

When I worked extremely hard daily to save and expand, it didn't feel quick enough. Then I would just get burnt out over time.... 

But then when I tried to relax and recharge, I felt guilty for not taking action towards my goals because of this imaginary time frame. 

It wasn't a good cycle.

I then started listening to @Chad Carson, who wrote "The Small and Mighty Real Estate Investor". 

He spends A TON of time with his family, moved out of the country with his wife and kids, and "retired" off of a relatively small portfolio with little debt that took about 20 years to create and consolidate. 

He also interviews full time investors w/ similar stories and portfolios. Long story short - I realized how powerful only 3-4 PAID OFF rental properties can be. 

A consolidated, simplified portfolio. Managers in place. Renovated properties. Maintenance budget covered. Good, stable tenants with solid property management. 

Roughly $7-10K per month coming in (in certain markets). 2-3 hours of work per week managing the managers..... not a bad place to be.  

Maybe nobody else is struggling with this - but I wish it was talked about more and I just wanted to put it out there with the hopes it helps even one person's perspective.

[Scott Trench]

“Enough” may most powerful word in the English language, when it comes to investing.

There’s always someone buying their 10th, 100th, or 1000th unit. The kind of leverage one has to use to get there, and the kind of expectations one has to set with investors seems unbearable to me, especially as near term market rents and cap rates are totally out of your control. 

There's this unhealthy focus on celebrating people who buy property. The celebration should be when it is paid off, or otherwise exited. Almost anyone with a good sales pitch can buy lots of property. The game is what kind of returns or freedom you produce, and how the thing is working for you in year 5, or 10. Funny, I have seen far fewer of the people who bragged about unit count 3 years ago posting their scores on IRR or exits recently. I've seen a few begging investors for more capital, preferred or common, to bail out their deals though!

There is everything right with owning a few properties and paying them off. People just have a hard time turning their mathematical optimizer brains off, and knowing when to say, “I have enough, this is no longer a math problem” and paying the things off and living their best lives.

The other problem with that is it’s like a 5-7 year journey, easily, once you make the call, to pay off property. During that time, you are just snowballing cash flow into mortgages. This doesn’t make for as compelling a post on social media.

I write this as I’m personally leaning towards to not taking on any more debt, consumer or real estate, though I reserve the right to change that opinion.