Here’s Why I’ll Never Sell My Multifamily Investment Properties

Here’s Why I’ll Never Sell My Multifamily Investment Properties

2 min read
Sterling White

Sterling White is a multifamily investor, specializing in value-add apartments in Indianapolis and other Midwestern markets. With just under a decade of experience in the real estate industry, Sterling was involved with the management of over $10MM in capital, which is deployed across a $18.9MM real estate portfolio made up of multifamily apartments. Through the company he founded, Sonder Investment Group, he owns just under 400 units.

Experience
Sterling is a seasoned real estate investor, philanthropist, speaker, host, mentor, and former world record attemptee, who was born and raised in Indianapolis. He is the author of the renowned book From Zero to 400 Units and the host of a phenomenal podcast, which hit the No. 1 spot on The Real Estate Experience Podcast‘s list of best shows in the investing category.

Living and breathing real estate since 2009, Sterling currently owns multiple businesses related to real estate, including Sterling White Enterprises, Sonder Investment Group, and other investment partnerships. Throughout the span of a decade, he has contributed to helping others become successful in the real estate industry. In addition, he has been directly involved with both buying and selling over 100 single family homes.

Sterling’s primary specialities include sales, marketing, crowdfunding, buy and hold investing, investment properties, and many more.

He was featured on the BiggerPockets Podcast episode #308 and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single family investing and apartment investing to mindset and scaling a business online. He has been featured on multiple other podcasts, too.

When he isn’t immersed in the real world, Sterling likes reading motivational books, including Maverick Mindset by Doug Hall, As a Man Thinketh by James Allen, and Sell or Be Sold by Grant Cardone.

As a thrill-seeker with an evident fear of heights, he somehow managed to jump off of a 65-foot cliff into deep water without flinching. (Okay, maybe a little bit…) Sterling is also an avid kale-eating traveller, but nothing is more important to him than family. His unusual habit is bird-watching, which he discovered he truly enjoyed during an Ornithology class from his college days.

Education
Sterling attended the University of Indianapolis.

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I never plan to sell a single multifamily property, and here’s why:

I’m Going Long

I’m in it for the long haul. I’m not just thinking about how to make money next month, hit a goal this year, or get rich in five. My eye is on the long game. I’m looking 10, 20, 50 years down the line and beyond.

It’s a Lot of Work

Sourcing, screening, negotiating, and closing on multifamily apartment buildings takes a lot of work and time. Often, that is just the beginning. Once purchased, you must deal with tenants. You’ll have to market the units, and you’ll probably have to renovate and improve the property at some point. Compared to the long-term rewards, to me, it doesn’t make much sense to sell after putting in all of that work. I want the best returns on my time and money. I want to know that I am really doing something worthwhile — something that will last. 

Related: Attention Multifamily Investors: Are You STILL Paying Taxes?

Taxes

The quick cash and returns some people rave about from flipping and wholesaling houses can sound really attractive. Until you do the real math and pay your tax bill. They never talk about taxes on reality TV. They talk about gross profit, which is in a completely different ballpark from net profit. You pay a lot less in taxes on long-term gains and passive income dividends than on active income or short-term windfalls. I’m not trying to give up a large fraction of the gains I work so hard to earn in real estate investing. That’s just not my model.

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Speculation

I believe it is just too much of a gamble to buy a property in the hopes of selling it. Especially after putting countless hours, energy, and precious capital into renovations and improvements. Some people say that you make your money when you buy, but really, you make your money when the property puts money in your pocket. I know I can do that with cash flow from tenants right away. There is never a guarantee that you can flip for a certain figure (or even sell at all). I see many investors setting themselves up for difficulties right now, overpaying for properties with hopes of flipping. None of the thousands of investors who got caught in the last crash expected they would get stuck with those properties, but they did. I buy for cash flow.

Related: Why the Wealthy Put Their Money Into Multifamily & Commercial Real Estate

Net Worth

Even the best properties may fluctuate in value at different times. Yet, in the long run, these assets keep going up in value. After all, what are you going to do with fast money anyway? Stick it in the bank at negative interest rates? Or stuff it in your mattress to devalue? I’m looking at long-term wealth building, which will in turn increase my real net worth. By holding multifamily properties long term, extra losses on transaction fees, taxes, commissions, can be avoided.

Summary

I’m not selling anytime soon. I’m going long, and never plan to sell my multifamily property investments. That may not be for everyone, but before you are quick to judge, do the math on the above factors and give it some thought.

We’re republishing this article to help out our newer readers.

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What about you? Have you sold and regretted it?

Or am I missing something about flipping that you think I should know?

I’m not just thinking about how to make money next month, hit a goal this year, or get rich in five. My eye is on the long game. Here's why.