I've reached my limit of personal experience

[Kevin Van Ness]

Careful...i realized after writing this it turned into a therapy session 😀

I came here to learn from others who have done more then I have.  I am topped out on what I am able to do on my own, yet do not know how to move forward, so I feel as thou I should reduce my portfolio.  

i currently have 19 buildings with 40 units mixed throughout houses, duplexes, and apartment buildings.  I manage all of them myself.  I am able to do most any repair besides HVAC repairs and electrical repairs that are complicated.  

i am 56 years old and am either looking to scale my business so much that i am no longer hands on, or else begin to sell off the properties and move the proceeds to "true" passive income positions. 

Althou I have 40 units, 6 of them are in various stages of mostly being totally rehabbed. As I mentioned, I do almost all of the work myself, so along with spending my days at one of these units I get the occasional repair call where I lose a day or two working on the rehabbing of the units. 

i began this journey in the belief that I could get out of the "rat race", but all I have seemed to do is move to a different wheel of it.  (I say this while I am eating breakfast at 10am at one of my favorite restaurants, so I know I do have certain perks with this type of job that others that work a regular job do not).  None the less, this is a job and not exactly what I thought I was working towards, or want. 

i began rehabbing property about 21 years ago as a way to stay busy during the summer time when i wasn't teaching.  Up until about 8 years ago it was just a hobby on the side and at that time i owned 6 units. After i quit teaching because i felt like the black sheep in the district, (i turned the principal at my school in for cheating on the Illnois state test) i crunched numbers, read books, and realized that real estate was a way to wealth i would not otherwise be able to obtain.  

For a bit, it was a very "powerful" feeling.  I bought and bought and bought, until I over bought and am in the situation I am in now with 6 places in various stages on being rehabbed and unable to be rented or sold for the time being. (My method of operation/profit has been to buy property that needs a lot of rehabbing, cheap.  Then, do the work myself, and raise rents significantly. 

That's part of my story!  If you can't tell by this therapy session I just wrote, I'm tired.  If you've read this far, you probably have had some type of similar experience.  If so, where are you now? Did you find a way to scale your business?  My banker would continue to let me buy, buy, buy.  I have very low "bad debt" and a lot of equity i could use for cross collateral.  However, without knowing how to successfully scale, I am stuck...in this rat race...still. 

[Dave Foster]

@Kevin Van Ness, I was just talking to your doppelganger this morning. The only difference is he is 36 with 600 units!! The greatest enemy to scaling is control - specifically giving up control. Whether you are scaling up a business or a real estate portfolio you will not be able to scale as effectively as you want until you are willing to give up control. The question is what do you want to give up control of. It sounds like you love sourcing deals, rehabbing and renting properties, and maintaining them. You can do all of that. But only to a point. Then you have to give up some control in order to maximize the momentum you want. Passivity can come but not without giving up control. The question is what do you give up. What can you give up? What do you want to give up?

There is a strategy known as a consolidation exchange, where you sell multiple investment properties to acquire a larger investment property in a 1031 exchange. This can create some scale as your dealing with the same dollars. But fewer tenants and toilets etc. If you took a few of your least-performing properties and started to consolidate your portfolio using 1031 exchanges, you could be reducing the stress of managing so many properties while using all of the tax to your benefit.

The strategy that we talked about this morning is to strategically begin to empty the hopper but only slightly faster than I can fill it. In other words, Keep growing the way you are by yourself. But systemically start to sell properties and 1031 into passive interests, or NNN commercial properties. You keep all of your tax deferral and depreciation benefits going. But each time you sell a property and 1031 into passive you give yourself margin to buy the next hands on project. You can keep your work-load right where it is or even lessen it while actually growing your income and net worth