I hit plateau in REI - how to scale up?

Columbus, OH · Member since 2018 · 164 posts · 126 votes

Have a great fulltime job with good pay and benefits - After investing in multiple states (8 units in total) (full turnkey) hit a plateau ( 1% rent rule, 9% PM fee, rent ready expense which offset your yearly ROI :) :) ) and the single family deals do not excite me anymore. would like to know from community members who hit similar scenario and how did they get out of this situation and scaled-up.

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Jon KellyPro Member

Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes

@Sachin Amin Shift your focus to larger multi-family. Maybe start with 4-10 units.

I would use your existing network of agents or however you are findings leads. You may need to begin networking with brokers in the multi-family space.

Make sure you specific criteria established before you start looking (e.g. min-max purchase price, price per unit, monthly cash flow per unit, etc.)

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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
Why not look to sell some of your single families and buy a duplex or 4plex?
2 Reply
Jon KellyPro Member
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
4y
@Sachin Amin Shift your focus to larger multi-family. Maybe start with 4-10 units.
I would use your existing network of agents or however you are findings leads. You may need to begin networking with brokers in the multi-family space.
Make sure you specific criteria established before you start looking (e.g. min-max purchase price, price per unit, monthly cash flow per unit, etc.)
8 Reply
Ping Zhang
Member since 2019 · 10 posts · 3 votes
4y
may I ask which city are you vesting?
1 Reply
Sachin Amin
OP
Columbus, OH · Member since 2018 · 164 posts · 126 votes
4y
Iam vested in TN,AR,MS,MD and OH
0 Reply
Sachin Amin
OP
Columbus, OH · Member since 2018 · 164 posts · 126 votes
4y
Iam vested in TN,AR,MS,MD and OH
0 Reply
Sachin Amin
OP
Columbus, OH · Member since 2018 · 164 posts · 126 votes
4y
@Jon Kelly hope multiple units are financed by Fannie and fredee?
with 25% down?
0 Reply
Michael Mulroy
Rental Property Investor · Cleveland, OH · Member since 2016 · 24 posts · 18 votes
4y
@Sachin Amin only on 1-4 units
1 Reply
Steven Libman
Rental Property Investor · Bluffton, SC · Member since 2014 · 54 posts · 45 votes
4y
@Sachin Amin, after flipping about 1k properties we saw the issue with single family and got into large scale Multifamily syndications (100 units plus). It became much more profitable, hands off, and tax advantaged
6 Reply
Jon KellyPro Member
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
4y
@Sachin Amin only 1-4 units, but you can shift towards commercial loans
0 Reply
Joe S.Pro Member
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
4y
Originally posted by @Steven Libman:
@Sachin Amin, after flipping about 1k properties we saw the issue with single family and got into large scale Multifamily syndications (100 units plus). It became much more profitable, hands off, and tax advantaged

Who’s we? 1000 flips sounds like A very large team.
0 Reply
Steven Libman
Rental Property Investor · Bluffton, SC · Member since 2014 · 54 posts · 45 votes
4y
@Joe S. The team got up to 11 at one point, but not really that big. I own the business with 1 partner. Now we own about 150mm in Multifamily
4 Reply
John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y
If you're in Columbus, why have you invested all over the USA rather than focusing on the area you're in? You'd be in a better position to view properties and could focus on developing one strong team instead of sprinkling your efforts over a wide area. You may have a reason, just curious as to what it is?
6 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
4y
Add value and flip or refinance (or invest in appreciating properties). Otherwise, you run out of capital and it's hard to scale.
3 Reply
Ed Tamayo
Investor · Sugar Hill, GA · Member since 2014 · 168 posts · 97 votes
4y
@Sachin Amin
If you have a full time job and have a number of rental properties, you could look into adding a more passive kind of investment.
2 Reply
Sachin Amin
OP
Columbus, OH · Member since 2018 · 164 posts · 126 votes
4y
@John Teachout when i started out i wanted full turnkey and columbus do not have any full trunkey companies similar to Memphis. (fully managed by great PMs)
2 Reply
Zambricki Li
Real Estate Agent · Los Angeles CA + Lake Tahoe, NV and CA · Member since 2021 · 180 posts · 158 votes
4y
It's a good problem to have. I say diversify inside the space. A great STR will cashflow well and creates a getaway for your family. I have several and it's great addition to my LTR's. Just pick your favorite vacation spot in the US and start your research. I have also intermittently sold and invested in Bitcoin--Stock--and then back into RE. Consider a cash out refi on something that has a lot of equity so you have an opportunity to make some bigger swings and options. I recently started to develop ground up/lot split on existing properties to diversify as well as it's cheaper per square foot to build than buy in my expensive area.
3 Reply
Dell J.
Member since 2010 · 210 posts · 158 votes
4y
0 Reply
Marc RiceBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
4y
Target bigger and better deals, use hard money or other peoples money. Focus on one market and get economies of scale there.
[email protected]614-363-2787
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
Website View Page
3 Reply
John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y
Originally posted by @Sachin Amin:
@John Teachout when i started out i wanted full turnkey and columbus do not have any full trunkey companies similar to Memphis. (fully managed by great PMs)

Yeah, but you listed five states!

0 Reply
Shoshana Shulman
Investor · efrat, israel · Member since 2014 · 93 posts · 20 votes
4y
Pardon my interest, but I would also like to understand the spread among five states.
I am currently looking for a long distance reliable turnkey, managed by a flawless manager, so if you are up for selling, let me know.
I would prefer Md. , as I already have a rental there, but I only buy in safe neighborhoods with decent schools.
Thank you.
2 Reply
Sachin Amin
OP
Columbus, OH · Member since 2018 · 164 posts · 126 votes
4y
@John Teachout yes I have one In each state, all those were my research markets when I started out. I still hold them
0 Reply
Joshua JanusBusiness Member
Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
4y
Find deals with larger # of doors and get other people involved. Leverage your current properties, equity and investment experience. Why would you limit yourself to only purchasing turnkey properties? Just curious.
[email protected]614-502-5316 Podcast Guest on Show From DoorDasher to $1.5 MILLION in Real Estate (All at 22 Years Old!)
1 Reply
Sachin Amin
OP
Columbus, OH · Member since 2018 · 164 posts · 126 votes
4y
@Joshua Janus I am hands off investor right now due to my day job. And my criteria is all my units should be managed by someone(PM) so far it worked but need to scale
0 Reply
Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
4y
@Sachin Amin The other investors comments are telling you the same thing. Given the market in 2022 maybe it's time to give up "am hands off investor right now due to my day job. And my criteria is all my units should be managed by someone(PM)".

I would focus on selectively selling and bringing everything home. Columbus, OH has been growing like a weed just Indianapolis and multi-family will continue to grow in these bigger mid west cities. I'd focus on your home market, network with brokers and agents, and define what size property you want to buy.
It's a niche in real estate. From what I gathered you never defined one.

3 Reply
Brandon GoldsmithBusiness Member
Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
4y
I would focus on bigger deals and figure out how to leverage partnerships better. @ @Sachin Amin
[email protected]614-963-3340
2 Reply

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