Growing Too Quickly??

[Mark Douglas]

Hey BP !

After one deal (FHA owner-occ duplex) under my belt, I'm very aware that I'm still considered a "newbie", but I'm super excited about accelerating my growth, so I've got a question:

Would it be better to pick up one SFR (student rental, to maximize use of bedrooms) every six months until I reach my freedom number, or buckle down and save up the down payment for another 2/3/4plex? A large part depends on my goals, of course, which are as follows: to reach $5,000/mo net income from rental properties by 2018.

I've heard the concept of growing too large, too soon mentioned in several of the podcasts, but I've only got one tenant right now, and I don't really feel like I'm trying to take on too much....or am I?

Have you found it better/wiser, in hindsight, to slowly build up your portfolio?  Anybody feel OK after picking up multiple properties in one-two years?  (Keep in mind, I'm single, no kids, have a full time job, and have a pretty high risk tolerance.) 

Many thanks :)

[Joel Owens]

It's not the number of deals you do. It's buying the properties at the right price and terms each time to build a solid portfolio. Don't be buying to feel like you are growing or doing something. I know people that went crazy growing and they have properties that make money, lose money, and break even. They tend to spin their wheels balancing out the winners from the losers with the portfolio.

If you just bought  2 properties a year that were great deals in 20 years you could have 40 properties. Likely during that time you would 1031 exchange and build up even further through equity growth for available capital and cash flow.

Be prudent and careful with your capital.