Too Big Of A Jump To Apartments?

[Michael Hooper]

I bought my first house in cash back in 2011. I moved out in 2014 and rented it up until last month, then sold it. The property sold for double what I paid for it, so i'm sitting on about 150K in cash. I'm wanting to continue investing in real estate, but I've really only own one investment property in my life. A friend of mine, who owns a 12 unit apartment complex is wanting me to invest with him in a 40ish unit apartment complex. I've never done apartment complexes before, but he has. I've been doing a lot of research, and it seem like a great idea as long as we wait for the right property. 

So my question is, assuming I trust this friend (which I do), should I pursue this? Is it an ok jump to make, or should I start smaller and work my way up? I do have a full time job, and will slowly build up more to invest, but this would tie up all of my investment capital for a while. Thoughts? 

Thanks

[Andrew Johnson]

Michael Hooper I don't think there's any reason not to assuming you have reserves in place, similar thoughts on how to manage/maintain the property, etc. One thing that is odd is why "40ish" as a number? Does it have to do with price-per-unit? Why not 30? Why not 25? Those questions go back to keeping capital on hand. Redoing a roof for 40 units is a way different economic value property than an SFR. You also run into different costs are boring stuff like gardening, pest control, etc. And repaving the shared parking lot isn't cheap! Not trying to be negative but you might want to invest $100K with him for 25 units and keep the $50K for any near-term "capital call" because of an unexpected cap-ex item.

One fun thing about a higher number of units is that *something* is always breaking. You almost have to get used to the idea of buying/repairing an appliance (or three) a month with 40 units. It's different than an SFR when you might have a few months of zero unexpected expenses.