Updated 3 months ago on . Most recent reply
Advice On Expanding Rental Portfolio
Hello everyone,
I was looking for some help on expanding my family's real estate portfolio. My family has 3 properties in total all of which are completely paid off. My question would be how would you scale your portfolio? Would single family homes be the right next investment or would you expand into to multifamily/apartment complexes. I also would not be opposed to investing out of state if necessary. Thank you in advance for any help that could be provided.
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Congratulations Noah and family on the paid off properties! As far as out of state investing, please be very careful with where and what you buy. I invest in California and also the Midwest (Indianapolis metro area). I have lost money on 2 Midwest properties (Class C, slowly gentrifying areas) "cash flow on paper" that I bought in 2023 from constant repairs and property management fees take a big chunk out (10% of monthly rent). The only one doing well is a Class A (nice suburb, great schools, low interest rate) that I bought in 2013 - I self manage this. You can read some of my old posts for a longer version.
What I would not do is 1031 and sell your California properties (I assuming they're in the Modesto/Merced area) and buy in an unknown market 2000 miles. In my opinion it's better to stay local or within a 2 to 3 hour drive. California limits our property tax increases to 2% a year (Prop 13). Many other states don't have this type of cap.
Btw I have nothing to sell you, just trying to help another CA investor from losing money.
I'm currently adding value to my CA properties and raising rents because buying right now is difficult anywhere and cash flow on long term rentals isn't there.
I'm tagging a few experienced investors whose advice I trust and wish I had communicated with them in 2022 before trying to "scale" and making my goal of owning X number of properties.