Thinking of trading my houses for Apartment complexes

[Jack B.]

And yes I'm aware of the 10-31 exchange, It's part of my plan. I've been reading and collecting guides and due diligence worksheets on apartment complex purchases. The biggest reason I'm considering doing it is that I have enough equity and cash to buy up to 4 million in apartments with 25% down. I'm looking at making $100 a door per month on 40-80 units. 

I currently manage my four Seattle area expensive single family homes myself, but even with four tenants it's turning out to be true that at 4 units you need help. Yet hiring a property manager for just four units doesn't scale well. It appears to scale much better for an apartment complex. Also, besides the increased cash flow because of the number of units, the risk of vacancy is reduced. To further spread the risk, I'd look to buy 2-3 different buildings, so that not all my money is tied up in one giant complex that if it fails (hurricane, earthquake, sink hole, insurance doesn't pay out, etc.), costs me everything.

I'm also looking forward to being able to take advantage of economies of scale when it comes time to raise rents every year. That's up to a 24K a year pay raise at bare minimum, not even counting on reducing expenses, utility bill backs, etc. And that's just the beginning. I live frugally so I would save the vast majority of that money and keep doing bigger and better deals. 

The key thing that keeps me from doing this right now is risk. I will still have to deal with all the major problems the PM brings to me. Lawsuits, (counting on it with that many units), evictions, trashed units, etc. Yes, I could build massive wealth with this strategy, but it's still a job of sorts. Sure the PM deals with the day to day stuff, but the major problems are still on my plate and can still give me an ulcer, so to speak. But in order to build more wealth at this point I need to really scale more and keep scaling. That said, I could just pull the plug now and retire and have 2-3 times my living expenses in passive income, go and enjoy life. But I think I would enjoy life more if I had 300K coming in every year and getting huge pay raises every year, to the point that time, I'm pulling in one million a year cash flow. I can of course invest that into index funds and build even more wealth and go party Justin Bieber style, lol. 

In any case, I now see how the people who end up with hundreds of units do it; they hustle and keep doing bigger and better deals. Well, I've been doing that with single family homes (one of my homes alone is worth nearly 3/4 million) but to really see increasing returns to scale apartments seem the way to go. Not only that but it gets me out of the day to day management. I'd have a live in property manager, in exchange for reduced rent/free rent/stipend/whatever is common for the areas I'm looking at (Nevada and Florida). Washington has too low a cap rate for apartments...