Why shouldn't I buy a hundred cheap SFH in a cashflow market?
I live in SF Bay Area, CA, and have a fancy tech job that I enjoy (at least I did before COVID). Have about $8k a month to invest in real estate after maxing retirement accounts thanks to high income and modest lifestyle as a single guy.
Started in real estate by buying a newish construction SFH in Bay Area last year for ~$625k at 5% down. Now have an amazing tenant in place (section 8) at $3,300/mo. About $50k of appreciation in 18 months, but rent only covers HOA, PMI, interest, taxes, and insurance - principal I pay out of pocket, and self manage. I bought this property as a hedge against the local market because I intend to stay in the Bay Area long term. Bought a duplex out of state for my mother - she covers the mortgage and all expenses while AirBnBing out the other side - I only bought it to subsidize her; pretend it doesn't exist. Have a bit over $100k in cash/index funds, and want to keep about that much as reserves since I'm prone to long hospitalizations due to chronic illness.
Over the least year I have 4 other out of state single family homes, in a small (but not tiny) midwest city which I deem to have a long term stable market (national average population growth, diverse stable economy, largest city for some distance, has both hospital and university, low crime). Total combined purchase price is $120k with $25k rehab resulting in about $80k of forced appreciation. Gross rent is $3,150/mo (average: $30k purchase, $6k rehab, $50k ARV, $785 rent). I own them all free and clear. (Double checked title and with tax assessor.) That's a 2.25% average gross monthly rental yield. If I scaled up my acquisitions to a bit over 1/month I would expect that ratio to drop closer to 1.8% (guesstimating), but I've also broken 3%. Everyone has paid on time in full this year so far.
I found a mentor in the market who is done scaling his own portfolio (he refuses to take on debt, just rode the 2011+ wave, and his cashflow pays for his crazy frugal lifestyle more than 10 times over). He opened his team to me. So, I have an investor friendly real estate agent. And I have a property manager / rehabber who leads a crew that works for (what I consider to be) peanuts. They appear to do good work (and are itching for more work this year). I've met those 3 core players all in person and they all seem like genuine people I can trust who know what they're doing. I'm perceptive enough to be sure of my assessment of them.
By my nature I'm (reasonably?) cautious, but ambitious and extremely-numbers-oriented. (I could have been a quant.) Every signal I'm getting is telling me to go to a portfolio lender and scale in this market until I can't anymore. I've been avoiding further debt so far because of how highly leveraged I am on the Bay Area property. I also didn't want to give up the superior financing rate/terms with conforming loans, but I now realize that missing out on even one deal over their restrictions cancels out the benefits they offer. (Talk about shifting to an "abundance mindset"!!)
Why should I not just go full tilt and double and triple down on this market? I watched a BP podcast of a guy who scaled to 100 properties in 2 years, and I think I could do that in 2-4 years, so 100 single family homes has become my next goal. I understand that there is significant logistical and maintenance overhead with 100 SFH, but I also don't hear about people acquiring multifamily at >2% monthly rental yields. How bad would the problems with 100 single family homes really be? I feel like those problems are firmly "good problems to have". Should I be balancing learning how to do something else while exploiting this opportunity? My disposition is agreeable enough, but I am not a marketing or sales guy.
My goals are to reach $5k+/mo passive income ASAP, then safely maximize IRR until I decide to quit my day job, which will realistically be several years (or tomorrow if I win the lottery). I've identified a couple other markets that look similar to the one I'm active in, and could expand into if I built a team there. This makes me nervous, since I'm not sure I could actually replicate the shockingly-easy success I've had in this market. I feel like there are big parts of the learning process I've just lucked into skipping. Am I just suffering from imposter syndrome?