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Blazing a new trail

August 12, 2012

Do you ever want to try something outside of your comfort zone in Real Estate? We are doing great with our rentals so far. We are happy with our returns, getting better at landlording, improving with each purchase, etc. But lately, I have been itching to try something different. As a buy and hold investor, flipping really sounds exciting. This is not a scenario where I have watched too many house flipping programs and want to get rich quick. I don’t desperately need the cash infusion. It’s the idea of being successful in another avenue of real estate that intrigues me. It’s all about the challenge.

I have also had the urge to buy a multi-family unit. Not just a duplex or quad, but 10-20 units. I know – it’s like I am a masochist or something. I am not lining up financing or anything – never really taken it beyond the occasional daydream. It’s just something always in the back of my mind. Getting started in single family homes was Blazing a new trail for me  – So perhaps it’s just re-kindling that initial adrenaline rush.

In any event, I am too conservative and cautious to step too far out on the ledge. It’s that age old question, “Do you leverage up big and put all your chips out there?”, or do you keep riding the steady horse that got you here?  We are not on some plan to be Donald Trump wealthy – just comfortable and secure. I feel we have already taken the path less travelled when we started investing and building wealth through rental properties. I just don’t want to get lost in the woods veering too far off the path.

From → General

  1. Melisa permalink

    I know what you are talking about I have the same itch sometimes. I love my buy and hold properties but I have this feeling sometimes to push it to the limit but I consistently block the challenge out of my head. I like when you stated ” We are not on some plan to be Donald Trump wealthy – just comfortable and secure” I feel the same way so I am currently challenging myself out of my comfort zone–I am currently bidding on multifamily units (up to 4 units) to comfortably get out there and hopefully one day I will turn that into the 16-20 multifamily units and/or commercial properties. As you stated ” I just don’t want to get lost in the woods veering too far off the path.”

  2. With both of us holding full time jobs, managing a 16-20 unit multi-unit would require a property manager for sure. And even if we gave up our full-time jobs to do this, we would just be switching jobs, not getting out.

    I also fear the exit strategy around multi-unit. Your only buyer is other investors – so you definitely have to buy right. IMO, you essentially have to buy a multi-unit where it is managed and maintained poorly and bring its property class up.

    As you start moving up to the bigger deals -The problems get bigger and the mistakes cost more – our plan is too just stay small and stick with what we know.

  3. Melisa permalink

    As a business owner who run two companies in addition to managing my rentals I understand the need of having a great team when stretching beyond my/the limits. I am not oppose to risk but I like to be a smart and strategic risk taker hence the interest in small multifamily units (up to 4) vs 16-20 multifamily units. I agree bigger deals sometimes lead to bigger problems and mistakes and I am not mental there to take those type of risk yet.

  4. Maybe you can live vicariously through me. I just bought a 22 unit apartment. So far I’m not sold, but maybe that will change once we increase occupancy. In California anything over 16 units needs an on-site manager. I like flipping, but it’s not really “real estate investing,” more like a day job or a business. Not passive at all compared to owning houses.

    • Steve,

      Congrats on the 22 unit. I think that is a great size. Not too big, but big enough. Hope you post a bunch about this.. Sounds like you can’t use the new manager that you just hired as the 22 unit manager has to be on-site. Curious about the size of these units – all 2 and 3 bedrooms or some smaller in there too? Keep me informed on this new acquisition and congrats again….With your rehab skills – i bet you can really turn it around.

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