All Forum Posts by: Peter G.

@Peter G. More power to you after all I may be wrong after all I only manage 700 units in okc so I may be off a bit, lol.  Best of luck in your goals it will be great when you get there.  I would suggest you watch the market close though, the over $1000 properties in the okc metro are moving extremely slow right now.  

My question would be why? To what end? Just so you can be big man on campus and say you own 1,000 rentals? Because Grant Cardone told you to 10x it? So you can water ski behind your 100 ft yacht? Do you really need $600,000/mo to live a fulfilling life?

I'm betting that you can meet any sensible financial independence goal with considerably less hassle, less risk, and far fewer units, especially if they are higher quality units. So why take the extra risk and hassle to get to 1,000 if the marginal benefit to you basically goes away (and then goes negative) after, say, 50 units ... and that is still way more than you should realistically need if you pick the right units at the right terms.

You are free to set any goal you like, but this one just seems silly to me personally ...

@Peter G. Why are you so set on the large number of SFR units in your portfolio? When the get rich in Real Estate Guru's talk about people having large number of SFR units in a portfolio, I don't think they really anticipate many if any of the followers to actually do it, that's mostly hype for the sales pitch, If they did it would mean they didn't truly understand the next level in RE investing.

I would rethink your plan and conduct some analysis on obtaining Institutional grade Multi-family properties. AS @Callum K. and @Brian Burke and @Jay Hinrichs have all noted, once your SFR portfolio reaches a certain number of units and dollar amount in value it becomes less advantages and more riskier for you exponentially every time you add a property to your portfolio.

If you're serious about growing a portfolio of that size do it in dollar value on the Institutional Multi-family side NOT volume of SFR's.

The larger you become in RE investing the further away from the beginners strategy you should be using especially past the 10 million mark.      

Buying SFHs in that volume in financially illogical. Way too mush money and work to justify the effort. SFH investors are generally small time due to the poor economics of SFHs.

Large numbers are in the realm of apartment investors where it all comes down to scale of economy. 100 tenants one roof, not 100 tenants 100 roofs. Maintenance costs do not make it financially viable.

Start small with multi units and sell everything to invest in apartments when you have the numbers and finances.

Leave the SFHs for the little guys.

I would caution you on your estimate for rents.  You will not find many homes in okc for 120k that rent for 1200 per month.  Most homes that are renting for 1200 per month here in okc are 150k to 170k houses.  5 or 6 years ago this was more doable but now it is tough but who knows maybe it will change in a few years.  You would need to get into properties that are sold under market and need some work and this would take more time and funds.  Overall though if you are at 1200 per month for rent in okc you are at the top 1/3 of the market for rental prices.  not the ideal place to be.  

Sorry to burst the bubble here, but I think Deren is correct.  There are a lot of holes in your thought process but I guess it might be nice to look at this as a dream or wish.  Below contains a few items that stuck out to me.

Financing - Getting 1000 mortgages is impossible.  Not only are you unable to get higher than 10, as your portfolio grows, you will likely need to go with a commercial loan.  With that, you can forget about the 30 amortization schedule and your interest rate is likely going to be much higher.  That will erode your post-financing cashflow substantially.

Maintenance - Assuming no maintenance over a 25 year period is not likely for one house, let alone 1000.  25 years is a long time and you are likely to experience several significant costs in that period.

Insurance - That cost of $1500/yr seems high to me.  I'd cut that in half

PM - If you really do have 1000 rentals, you will likely have your own staff of PM and maintenance, so 10% of rents is probably very high

Taxes - $2,500 for taxes (at least in Tulsa) seems high to me.  Maybe closer to $1800-$2000

Operational issues - With that many houses, you will need departments of people and infrastructure to operate.  This will become a significant cost as you grow

Finally, to help put this into perspective, assuming you will be looking for deals and not just buying at market price, it will be difficult to find so many properties.  Based on your model, you would need to close on 3.33 properties per month (1000 / (25x12)).

Sorry again to throw the wrench into your idea.  

No way. Even with systems in place, little houses will drive you nuts. 1,000 of them?  Let us know how you like them after about 8.

Unless you have a why larger than money, this 10x idea will put you in a rubber room!