All Forum Posts by: Syed H.

No offense, but this isn't a "successful" deal story. This is just a "deal story". You aren't experienced enough to know if it is. You will know if it's successful 12, 24, 36 months later.

You are just starting out. Just know that there is plenty you don't know and projections are just that: projections. Wait until u get hit with a water heater for $1k, bed bugs for $500, random water leak in the ceiling for $500, or god forbid a roof for $10k. You should def calculate a Capex $$ that is market and property specific. Percentages on low rent markets is never accurate.

It is always a newer person who thinks "hey I'm cash flowing $XXX", until they get some time under their belt and it is half of that. I see it in my own markets everyday. I've seen people bid 15-20% more than me and than say they analyzed the deal to cash flow $XXX, when that is impossible at the price they paid. Everything looks good in an excel sheet. 

Good luck, just remember you have a lot of learn, and there's nothing wrong with your projections being wrong. Unfortunately, you won't know what things costs you until it actually costs you $. You pay a different price to maintain a property than me. You pay a different price to manage your property than me. You manage your property differently than me. (not saying your better or worse, just that everyone is different). Projections/Assumptions become more accurate and tailored to your own experience. You just have to adjust and adapt. 

There’s a difference between pessimism and being realistic. If you think the world is ending, your just a pessimist and good luck to you. If you think yes this is an upcoming down cycle, and eventually we will come back stronger, that’s just being realistic. This always happens. 

Let’s not pretend like the GFC didn’t make us lose and earn A LOT of money. I met plenty of pessimists in the GFC. Most of them are barely back to what they used to be. The guys that saw the light at the end of the tunnel are all wealthier and better off than pre-GFC. 

Be careful with the town. Do not let them in.

Some of the towns in LI are a pain in the ***. If they require a rental permit and you didn’t get one yet, it’s a huge headache. Speaking from experience of spending thousands of dollars Bc of that early in my start. 

A novice starting in Cleveland or any other far OOS markets sounds like a horrible idea IMO. That’s what turnkey providers want to sell you for inflated numbers. Be very careful. Trust me a lot of those “cheap” markets are horrendous to own in. 

Of course they would, but like I said, 25-40 small multi unit isn't equivalent to 10 SFH's. Those aren't fair comparisons.

You should compare 10 quadplexes to 40 SFHs.

They both have their pros and cons.

10 quads will usually be less square footage than 40 SFH's. You also have 40 roofs vs 10. If you calculate your capex/maintenance/turnover the same as you do for a quad vs sfh, you are in for a rude awakening. The SFHs will always equal more in capex/maintenance.

The good thing of sfh’s is the abundance of supply, usually longer term tenants, and easier comps to pull if the market goes up. With small MF, you have less square footage, less roofs, you can aggregate them, and sell/refi them as a portfolio with a closer to true MF cap rate. 

MFH is how people reach scale. Besides PE giants, no one owns 100s or thousands of SFHs. I know plenty of people who own a 100+ units of MFH. I know maybe 2 people who own more than 100 SFHs. 

IMO, scale should be the goal for almost all REI's. Owning a few units sucks. There's better returns with less stress/time than a couple of houses. Owning a nice sized portfolio of MF units, is easier than a few SFHs (to a certain point of course).

 No offense, but it could be just your management. I own both as well. Both have their pros/cons. 
My multis don’t have insane churn and they make a lot more money than my singles. 
& churn in a single costs you way more than than churn for 1 apartment.
At the end of the day, SFH have way more sf and that sf costs you a pretty penny.

You rarely see people reach scale with just singles. Now if your someone who is doing this as a side gig and is happy with 5-10 units and some extra retirement money that’s great. But plenty of people do this as their career and need more. 

& 10 units vs 40 units isn’t really a great comparison. 40>10. Incremental added work for substantially more money. 40 units of Small multi vs 40 sfhs is a better comparison. 

Almost 31. 41 units. 9 in contract. Realistic goal: 200 within 2-3 years. 3 SFHs & rest are a mix of multis (3+ units). 

Started right out of college as a part time flipper. Worked in the CRE industry. Only started building the rental portfolio in 2018, already have a huge amount of equity with forced appreciation.

Flipping isn't overrated, it's just for a certain type of property. Plenty of SFHs never make sense as a rental & the money you can make greatly exceeds how much you can make off a rental in a reasonable amount of time. 

Just remember, all comps aren't successful comps. Plenty of people, this late in the cycle, buy horrible flips and end up losing money. 

Also it is very tough to compete if you have no competitive advantage. Flippers/Builders have a lower cost of construction than someone new. That's why they can bid higher. Newbies can also bid higher because they don't know any better.

Go with your numbers and be comfortable with winning/losing with your own analysis. 

My plan is 40. Thank god for starting early. 9 more years. But my retirement will be most people's regular w2 life. I'll limit myself to only 30-40 hours in retirement. Just manage the portfolio and do a few flips.