Need Advice: Buy more SF Homes or Jump Into Multi-Family

[Cory Jones]

Hi Everyone,

This is my first post on Bigger Pockets and I'm looking forward to learning from all you real estate experts!  My name is Cory and I'm and active (part-time) real estate investor.  I live in Utah but focus entirely on single family properties in Memphis, TN.  My brother lives in Memphis and got me started in real estate investing about 3 years ago.  I'm at a point now that I'm starting to get pretty aggressive with my investing and wanted to see if I could  get your advice on my investment plan. 

I currently own 7 single family homes and they rent between $675 and $800 per/mo.  Since I'm buying in Memphis (and focusing on rehab properties) I've been able to buy all of my units and renovate them for around $20K each.  Though there has been a lot of challenges with tenants (given its a rougher area), the cash flow on the properties has been terrific.  We've finally nailed down the specific neighborhoods and property qualities that attract long-term tenants.  Given my success in this area, I'm considering taking $80K in equity out of my primary residence to buy more homes there.  

My concern though is that I'm starting to put all of my eggs in one basket.  I'm only 30, but I drained my 401k to buy all of my other properties in cash.  So these properties make up my net worth.  Due to this, I have been thinking about diversifying a bit (outside of Memphis) and buying a small apartment complex or fourplex in Utah.  I know it all depends on the area, but (in general) would you all recommend jumping into commercial units or continuing on with SFHs?  Thank you all in advance for any insight/advice you could provide!

Thanks,

Cory