Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Investor Mindset
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 7 years ago on . Most recent reply

User Stats

9,999
Posts
18,564
Votes
Joe Splitrock
  • Rental Property Investor
  • Sioux Falls, SD
18,564
Votes |
9,999
Posts

Courage to Buy My First $2 million Dollar Property

Joe Splitrock
  • Rental Property Investor
  • Sioux Falls, SD
ModeratorPosted

Let me start out by saying this question has less to do with finding the money and more to do with finding the courage. 

I have been investing in real estate, buy and hold, as a side business to my day job since 2004. Early on in my investing, I owned a 6 unit apartment building and duplex. Around that time I also started buying single family homes in B+ neighborhoods. My experience was that the multifamily properties made good money, but were very time consuming. The single family homes didn't make as much money, but my time investment was very limited. My day time job demands 50 hours a week and includes travel, so I may be gone for days at a time. It is a good paying job which I enjoy. As I was starting my family, I made the decision to sell the multifamily and focus on the single family. The main reason for this decision was to reduce my time investment. I also like that single family homes can be easily purchased and sold. With my day job it is not difficult to save up a 25% down payment and get conventional mortgages. I am now up to eight single family homes and I am trying to define my strategy going forward.

I have been shopping single family and with higher prices, it is getting harder to find a good cash flow. I want to accelerate my business, so I opened up my search to multifamily. I got an off market opportunity for a 24 unit apartment and the owner wants $2,000,000. I am not going to get into the deal analysis. For the sake of this discussion, assume it is a good purchase. I have the means to come up with the down payment and get financing.

The question is how do I get courage to buy my first two million dollar rental property? My largest rental property deal up until now has been $160K. This one deal would more than double the value of my rental portfolio. I am comfortable with what I have today, but my experience is that my greatest growth has come from getting totally uncomfortable. My why here is that I want to accelerate my growth and increase my rental income. I would have to add 12 more single family homes to get to a similar size. Without finding someone to sell a portfolio, it would be time consuming. 

I am looking for others to share their stories, thoughts, tips or wisdom. 

  • Joe Splitrock
  • Most Popular Reply

    User Stats

    268
    Posts
    247
    Votes
    Vinay H.
    • Cambridge, MA
    247
    Votes |
    268
    Posts
    Vinay H.
    • Cambridge, MA
    Replied

    I am not thinking it is just extra zeros. I am thinking you may need to review all your systems from rent collection, book keeping to property management. As you said, the single family houses were "hands off" for most part. With 2M multi, I am assuming you will have at least 10 to 20 doors to manage, so you can expect one move-in, one move out, one delinquency and one major repair or issue every month. It is still an exciting opportunity and I am sure a stepping stone to the big league :) It's like anything in life - going from managing a team of 3 to a team of 30 requires different (and better, more efficient) processes and systems.

    Loading replies...