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Updated over 5 years ago, 06/25/2019
Single family rentals
I am interested in hearing from people whose portfolio consists of single family rentals. I currently own 7 sfr. I’ve had great success acquiring them over the past three years. But it seems like this is the point where most people start investing in multi family. I’m not really wanting to do that. I run a car dealership in Maryville TN and love my job. So I really just want to keep snagging up sfr. Hopefully over the next ten years I can acquire about 30 more. Has anyone taken the single family only route? If so please lend some information on why you chose it. My initial goal was 40. But with me only being 28 years old. I think I should be able to pass that up
Originally posted by @Mark Fries:
I started in 2012. I decided to buy a home for my mother so she could move closer to me and then she decided she did not want the home so I just turned it into a rental and that started the whole thing!
I started in 2015. But I do use financing. I have been using 20% down conventional financing. But just got my first brrrr property. You are at a torrid pace. So you’re averaging buying a property every other month for the past 6 years
What @Mark Fries said. I bought my first SFH buy/rehab/rent as a hobby 10 years ago. The 18th one allowed me to retire early and cash flow life. BTW, I don't need the 'dead equity' lecture. Clocks and calendars are for kids. Life is good.
#2 General Landlording & Rental Properties Contributor
"However, I recognize the value in only SFR. It's less work, they appreciate better"
Only my personal opinion but I do disagree on these points. Per tenant I believe SFH is far more work and when I say work I mean maintenance per tenant. The whole one roof per tennat as opposed to one roof and multiple tenants. As for appreciation we all know the value of a SFH is driven by home buyers and the economy as opposed to the income based appreciation of a multi. Appreciation is always a complete unknown with SFHs. Yesterday is no guarantee of tomorrow as we all know.
Overall I view SFH investing as much higher risk, all your eggs in one basket, and therefor the "potential" reward less attractive. The value of multi investing falls squarely on strength in numbers.
I think it has to depend on the market. For example, here in Southern California, it's almost impossible to find a cash-flowing SFH. Yah, it'll appreciate like crazy, but expect it to be a tax deduction against other income for a bunch of years.
And it's only gotten worse since they started building the new Rams stadium in Inglewood. A couple of years ago you could get a 2 bedroom dump for 2 to $300K, fix it up, and maybe flip it for 20 to $50K profit or maybe hold it for modest cash-flow. Now, you can hardly find one for under 5 or 600K or more, and it's still a dump. You maybe can fix and flip it, but nobody is going to pay $3.5 to $4K monthly rent needed to cash-flow.
Originally posted by @Terrell Garren:
What @Mark Fries said. I bought my first SFH buy/rehab/rent as a hobby 10 years ago. The 18th one allowed me to retire early and cash flow life. BTW, I don't need the 'dead equity' lecture. Clocks and calendars are for kids. Life is good.
Thats awesome. I run a car dealership and using the sfrs for retirement. I’m 28 now. And just putting the properties on 20 notes.
I have a large portfolio of single families. I bought many of them during the downturn when they are cheap, so the yields are decent.
My main advantage with single families is that I get longer tenancy. My main disadvantage is that the repairs and turnover costs are much higher.
For my apartment buildings, my main advantage is scalability and efficiency. Scalability means that I can build a portfolio quicker. An example of efficiency is that I only have one roof and boiler. And also I don't have as many locations to manage - which can be a problem with single families.
I believe the single family model works well for the smaller or beginner investor. If the house is located in a decent area, it is easy to liquidate the investment by selling it as a regular house. Some of my single family rentals located in lower middle class areas are most likely permanent rental houses.
