How many homes is your goal?
Member since 2023 · 21 posts · 21 votes
How many homes is your goal?
Most Popular Reply
Winston CovingtonPro Member
Realtor · Santa Ana, CA · Member since 2014 · 131 posts · 111 votesGood evening Byron, your question is an interesting one. Personally, It’s the total positive cash flow that matters most. Bigger #’s doesn’t equal better cash flow. My retirement goal is to have 10 nice B grade homes in good neighborhoods with great schools paid for free and clear. That along with my primary residence being free and clear will provide a great retirement and allow my wife and I to pursue our “ Bucket List “ and enjoy a comfortable lifestyle. It will also provide us a chance to share our blessings with our Church, Community and favorite Charities. :-)
48 Replies
- Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes3y
12 sounds like a lot for most investors. I really don't think there are that many people who have 12 single family. I'll bet there are a lot more that have 1-2-3. Unless you hear people talking about multi-family and then 60% of the people want to tell you how many doors they have and how much $AUM. Everyone is different about their goals and maybe how much work they want to do. If you do a lot of it yourself, I'm thinking 12 is a good part time job....you get to 20 or so and that's probably a near full time job. Even if at some point you hand over some of the work to PM you still have some work to do every month. If you have 20 with 5% vacancy, that's one a month that you're closing out the last tenant, getting a new one, doing make ready, fielding phone calls or managing the PM and repairs.
I think when I started my goal was 2 a year....get about 20 by 65 and have them all paid off and then decide what to do with them. Sell them or just cash flow. Never got to 20 before I decided I didn't really like cleaning up after other people...and wanted to do less work and leave less work for my family if something happens to me. So I rolled up to bigger and better projects with less work for me personally....and more reading and typing vs swinging hammers and pushing brooms and paintbrushes. So I've seen a fair amount of people over the years get to about 10 or so and then decide to go a different direction...go to more passive investments or rolling up to small apt building or 2-3 4plexes, something like that. In someplace like Tyler, it might be good if you could control a whole block or neighborhood over time. Then you could get some increases in value if all your yards look nice, all your exteriors are well kept, etc. Maybe better rent bumps too. I'm sure there is a neighborhood that probably needs help. Then you also cut down your drive times and mess around times when you can show your 2-3 vacants in 15 minutes vs driving all over town. When you go to fix something you can hit 2-3 houses at one time. Maybe your landscaping guy and painter and roofer and handyman give you a little break if everything is close together.
- 3yJake AndronicoBusiness MemberRealtor · Reno, NV · Member since 2019 · 1k+ posts · 938 votes
Great question. I think 4 paid off homes is super solid.
That may require more purchases along the way, but that's a phenomenal place to be.
I love listening to Chad Carson and John Schaub about this topic.
Both have consolidated their portfolios and spend very minimal time on it.
- Member since 2023 · 21 posts · 21 votes3y
Right now I am going to just build a good portfolio. I am leaning torward paying off as many as I can then basically letting it coast. My goal is to teach my son's as we go through the journey. The idea of having a 40 unit apartment paid for or 20 or some SF homes seem amazing.
- Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes3y
I know @Scott Trench has some research on this and the real number for most investors is one to three operating units.
- Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes3y
Most questions as to profitability aside, I wouldn't want to manage more than 25 here in the Pittsburgh area all by myself, with the level of personal attention and maintenance I think is appropriate, and I wouldn't want anyone else managing them who wasn't personally trained by me and on my payroll. Ideally, all 25 would be well-maintained single-family and smaller multifamily in solid C working-class neighborhoods less than 10 miles from my home base. They'd all have a long-term maintenance plan and schedule and I would be familiar with all their weaknesses.
All of them would be peak-period Pittsburgh residential construction, that is to say, extremely well-built brick-veneer residential construction built just before the Depression or during it. I'd also accept many of the small duplexes in the area erected at the close of WWII for returning GIs.
If you get a portfolio like that together, with tenants you've put under the microscope, working with the right people in the right agencies, yeah, that would work. The monthly gross rent intake would probably be about $30K at today's rates and you'd be spending less than $10K of it in regular monthly costs and long-term capital set aside for your reserves. Cash flow of about $264K a year on about $3M in assets with less than $1M in initial cash outlay over time. 8.8% annual net ROI, year after year. I think it's doable. - 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @JD Martin:
Quote from @Byron Paille:
JD I like that. I am retired Army " bad injury" and retired from teaching Brazilian Jiu-Jitsu. I would like to double my retirements. So for me it is 10k a month. That way if something happens to me my son and wife have little to worry about. Also have a desire to own my own ranch in TX for bowhunting. Those carry a couple million price tag. Be cool to have rental homes pay for the ranch.
10k a month is easily doable with a little persistence. The ranch might be a bigger stretch, but maybe instead of owning the ranch you can have rentals pay for a nice long hunting trip every year. There are lots of multi-multi millionaires that rent fishing and hunting trips all over the US rather than own the ranch themselves.
Since I have been on BP 10k a month seems to be the common number that folks talk about being able to live the rest of their life on that amount.. My self personally I dont think so. 10 years ago maybe in 10 to 20 years from now I think that wont be a enough.. I mean health insurance for a couple until you get to medicare is going to be 1 to 2k a month just that . Depending on your write offs you may have to pay a little tax on your 10k so say 1k for tax.. so now your at 7k a month.. I guess one can make it on that if they have zero consumer debt zero car loans house is paid for etc etc. Although once folks hit retirement age SSI will kick in if its still there.. but to me 10k a month in todays dollars is just subsistence living basically. - 3yPeter MckernanBusiness MemberResidential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
Quote from @Byron Paille:
I am in my late 40s. I have always dabbled in real-estate and done well. I am approaching it in a much more specific way now. Should be closing on my 6th rental next month.
What is the goal number of homes for most of you? I do not have a set number yet. I read most investors only have 12 on average.
Are you looking at a monthly dollar amount more so than house or unit amount?
This is all about what your goals are and what you see for yourself on cashflow, equity and overall net worth.
That being said, I would look at it as where do you want to be on cashflow and debt at a certain age. Some people do not want to do any debt and some people are all in on debt because they are willing to take more risk. These two questions are the biggest for you as a real estate investor on your journey to your goals. There is nothing wrong with wanting 5 rents, 500, or 5K rentals. It boils down to your wants and goals.
The McKernan Group4.957 Reviews - Member since 2022 · 485 posts · 216 votes3y
For me it’s less a unit number than income. My rough ballpark number is about about $30k monthly net. I can retire early and still pay down the properties and build an equity fund long term for the kiddos. I have huge concerns about AI long term so want some income offsets for the kids down road.
But mine number is essentially my income replacement. Can continue to invest and live without working to 65.
- Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes3y
Something else I'd like to point out that I don't think I made clear up enough in my original post: I would prefer a higher number of more affordable rentals than a lower number of more expensive rentals. It's a given that A-class tenants are generally less sketchy than B-class tenants, and B-class tenants are more reliable than C-class tenants, but there's always a chance in every tenant class that someone's life will go down the toilet bowl, however stable they seem. There's also an additional risk that a luxury rental will empty out suddenly in an economic downturn as people look for more affordable housing. So, I would much rather be sitting on 20 C-class rentals paying $1-1.5K a month than 5 luxury rentals paying $4-6K a month when a local plant closes its doors or they start jumping out of windows on Wall Street.
- Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes3y
Quote from @Byron Paille:
I am in my late 40s. I have always dabbled in real-estate and done well. I am approaching it in a much more specific way now. Should be closing on my 6th rental next month.
What is the goal number of homes for most of you? I do not have a set number yet. I read most investors only have 12 on average.
Are you looking at a monthly dollar amount more so than house or unit amount?
Where’s you get that 12 number? Most that invest in 1 don’t even get to 2!
For me I think as I’ve expanded I’d love to have less lol.
I’d base it more on income. Really it depends what you want. Do you want wealth generation, income replacement, etc.
If income replacement is the goal you’d almost be better with less doors and more paid off properties. Less headache and a lot of buffer for repairs.
If you want to generate bigger wealth and leverage and grow wide but not tall, then multifamily is a good goal. But it comes with more active management and more headaches. The more doors you get the more problems you have.
- Member since 2022 · 485 posts · 216 votes3y
Quote from @Jim K.:
Something else I'd like to point out that I don't think I made clear up enough in my original post: I would prefer a higher number of more affordable rentals than a lower number of more expensive rentals. It's a given that A-class tenants are generally less sketchy than B-class tenants, and B-class tenants are more reliable than C-class tenants, but there's always a chance in every tenant class that someone's life will go down the toilet bowl, however stable they seem. There's also an additional risk that a luxury rental will empty out suddenly in an economic downturn as people look for more affordable housing. So, I would much rather be sitting on 20 C-class rentals paying $1-1.5K a month than 5 luxury rentals paying $4-6K a month when a local plant closes its doors or they start jumping out of windows on Wall Street.
So this is an interesting comment. I’m focuses on targeted vacation rentals these days, so the classification is tougher in my mind due to scale of market but I fall into probably B-type. More scalable not as messy as the multi-million but they are still newer/updated properties.
I can see why some might to go C-Class if you were in high CF, low capital regions Cleveland, Pitt etc.. But I feel like that also comes with headaches - c-class means tenants might not pay which can be more work than vacancy (they get hit harder by inflation or local plant closes.
Smaller set of properties for me is less management, less maitenance, and usually the capital isn’t the same % increase when compared to the extra cash flow. Meaning For the same downpayment on 2 c-class, I can buy 1 A/B that cash flows 3.5 to 4.5 C class.
Granted some of that is cash flow.
In the end though I’m not sure I want 60-80 C-class to manage, especially into retirement as I do 15-20 A/B Class. Also, the appreciation returns are far better.
It’s all give and take but interesting how people view the numbers long term.
- Member since 2023 · 21 posts · 21 votes3y
Right now I am going to just build a good portfolio. I am leaning torward paying off as many as I can then basically letting it coast. My goal is to teach my son's as we go through the journey. The idea of having a 40 unit apartment paid for or 20 or some SF homes seem amazing. I agree there is a take and give on doors vs CF. I like the idea of later acting as the bank and carrying the note.
- Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes3y
I have wrestled with this question since I started in real estate and what I am about to say a lot of people will not like to hear.
When I first got into the business I said ten units ideally single-family homes that net me $1,000 per month each so I can make $120,000 per year.
Over time, I forgot about this goal and started to focus more on the niche that I wanted to grow into and focused on scalability and profit. Believe it or not, there are people with a hundred units that work less than others with 10 units.
Start by:
1. Focusing on the Life you want, be sincere don't copy someone else.
2. How much NET cash flow would you need to achieve that life?
3. How many units would you need to achieve that cash flow?
4. Find the more guaranteed and niche with the least resistance, then pursue it.
That is the answer and anything else is a reflection of someone else's life pursuits.
- Investor · Fresno, CA · Member since 2016 · 222 posts · 237 votes3y
There are too many avenues in real estate, and too many different life goals among investors for a universal answer. One person may love having 10 paid off houses in class-B areas, and another may feel bored or broke at that level.
It is ultimately a mixture of cash-flow needed to obtain financial freedom, and enjoyment of the activity. There is always some trade off and nothing is truly 100% passive.
I suspect that the "small and mighty" portfolio is the right answer for the majority of people due to less overhead, decisions, and the high degree of achievability.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Quote from @Joe S.:
How did you come up with that number?Quote from @Eliott Elias:
Less on number of properties, more interested in how much cash flow those properties can provide me. 100 K a month is my number.
It'll keep me very busy.
- Member since 2023 · 4 posts · 0 votes3y
Quote from @Chris Seveney:
Quote from @Byron Paille:
I am in my late 40s. I have always dabbled in real-estate and done well. I am approaching it in a much more specific way now. Should be closing on my 6th rental next month.
What is the goal number of homes for most of you? I do not have a set number yet. I read most investors only have 12 on average.
Are you looking at a monthly dollar amount more so than house or unit amount?
My goal is 1 home. The one I live in. Why? Because I have owned lots of real estate in the past and now own the loan, love being the lender over owning the property all day long. While there are alot of benefits to owning the real estate, sometimes its not worth the aggravation.
As the lender, how do you provide an advantage over traditional banks? Say I wanted to purchase a 500k home with 20% down, why would I come to you over a bank?
- Member since 2023 · 21 posts · 21 votes3y
Quote from @Jon Rovia:
Quote from @Chris Seveney:
Quote from @Byron Paille:
I am in my late 40s. I have always dabbled in real-estate and done well. I am approaching it in a much more specific way now. Should be closing on my 6th rental next month.
What is the goal number of homes for most of you? I do not have a set number yet. I read most investors only have 12 on average.
Are you looking at a monthly dollar amount more so than house or unit amount?
My goal is 1 home. The one I live in. Why? Because I have owned lots of real estate in the past and now own the loan, love being the lender over owning the property all day long. While there are alot of benefits to owning the real estate, sometimes its not worth the aggravation.
As the lender, how do you provide an advantage over traditional banks? Say I wanted to purchase a 500k home with 20% down, why would I come to you over a bank?
I wouldn't. My acting as the banking is for those having issues with the bank. If you can buy a house outright there is no need. Advantages for me not for thee. No repairs, no taxes, no insurance that is all on the borrower. I make money during the length of the loan.
If they do not pay I forclose and resale the home. A few I know that do this even have early payment penalty so they may make a certain dollar amount on a sale.
- Member since 2023 · 4 posts · 0 votes3y
Quote from @Byron Paille:
Quote from @Jon Rovia:
Quote from @Chris Seveney:
Quote from @Byron Paille:
I am in my late 40s. I have always dabbled in real-estate and done well. I am approaching it in a much more specific way now. Should be closing on my 6th rental next month.
What is the goal number of homes for most of you? I do not have a set number yet. I read most investors only have 12 on average.
Are you looking at a monthly dollar amount more so than house or unit amount?
My goal is 1 home. The one I live in. Why? Because I have owned lots of real estate in the past and now own the loan, love being the lender over owning the property all day long. While there are alot of benefits to owning the real estate, sometimes its not worth the aggravation.
As the lender, how do you provide an advantage over traditional banks? Say I wanted to purchase a 500k home with 20% down, why would I come to you over a bank?
I wouldn't. My acting as the banking is for those having issues with the bank. If you can buy a house outright there is no need. Advantages for me not for thee. No repairs, no taxes, no insurance that is all on the borrower. I make money during the length of the loan.
If they do not pay I forclose and resale the home. A few I know that do this even have early payment penalty so they may make a certain dollar amount on a sale.
That makes sense, but since you're likely dealing with sketchy borrowers, maybe poor credit or a history of defaulting that scares away banks, what do you use to guarantee they pay on time or won't abandon payments midway through? Some kind of collateral?
- Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes3y
My goal is to sell now, and get to zero-- and become a hard money lender!
So many people fail to realize, the more you have-- the more stress it is, it's a lot to manage, and the more you get, the more work it is, that is --if you're a good landlord and maintaining your houses.
- San Diego · Member since 2022 · 10 posts · 11 votes3y
I want to hit 15k/month in cashflow.
- 3yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
I don't have a cash flow or property number. I just want my kids and my kids' kids to have a ton of resources. By a ton, I mean a large presence in 8-12 cities and enough systems in place to see this run it's course. I am not sure how many houses that would be, but I would figure close to 50-60 if they are all of higher quality. If it's a mix, then probably 70-75.
- Member since 2023 · 21 posts · 21 votes3yLarger down payments. My few friends that do this have had zero repos after 15 years of doing the banks job. They charge a higher interest rate with a good down payment. These are c houses fixed to b homes. One payed 50k at an auction, 25k rehab, then listed for 125k sale price. 20k down at 8.5 interest rate. You have 55k invested with $395,361.80 paid for a 30 year note. Now they are charging 10% with prepayment penalty of 20k the first 10 years of the loan.
Quote from @Jon Rovia:
Quote from @Byron Paille:
Quote from @Jon Rovia:
Quote from @Chris Seveney:
Quote from @Byron Paille:
I am in my late 40s. I have always dabbled in real-estate and done well. I am approaching it in a much more specific way now. Should be closing on my 6th rental next month.
What is the goal number of homes for most of you? I do not have a set number yet. I read most investors only have 12 on average.
Are you looking at a monthly dollar amount more so than house or unit amount?
My goal is 1 home. The one I live in. Why? Because I have owned lots of real estate in the past and now own the loan, love being the lender over owning the property all day long. While there are alot of benefits to owning the real estate, sometimes its not worth the aggravation.
As the lender, how do you provide an advantage over traditional banks? Say I wanted to purchase a 500k home with 20% down, why would I come to you over a bank?
I wouldn't. My acting as the banking is for those having issues with the bank. If you can buy a house outright there is no need. Advantages for me not for thee. No repairs, no taxes, no insurance that is all on the borrower. I make money during the length of the loan.
If they do not pay I forclose and resale the home. A few I know that do this even have early payment penalty so they may make a certain dollar amount on a sale.
That makes sense, but since you're likely dealing with sketchy borrowers, maybe poor credit or a history of defaulting that scares away banks, what do you use to guarantee they pay on time or won't abandon payments midway through? Some kind of collateral?
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes3y
Quote from @Jon Rovia:
Quote from @Chris Seveney:
Quote from @Byron Paille:
I am in my late 40s. I have always dabbled in real-estate and done well. I am approaching it in a much more specific way now. Should be closing on my 6th rental next month.
What is the goal number of homes for most of you? I do not have a set number yet. I read most investors only have 12 on average.
Are you looking at a monthly dollar amount more so than house or unit amount?
My goal is 1 home. The one I live in. Why? Because I have owned lots of real estate in the past and now own the loan, love being the lender over owning the property all day long. While there are alot of benefits to owning the real estate, sometimes its not worth the aggravation.
As the lender, how do you provide an advantage over traditional banks? Say I wanted to purchase a 500k home with 20% down, why would I come to you over a bank?
you would not come to us as we have zero advantage in that situation.
But what about the business owner who owns 10 properties worth $3M and wants a $500k loan and the bank will take 90 days to do a portfolio loan and ask for everything including their first born, and they come to us and we can originate this loan in 2 weeks. The last 5 loans we did were atleast 12% interest not including points and we get interest prepaid. each one was over $1M loan.
We also buy a lot of defaulted paper at a significant discount. We then either get the borrower reperforming and sell the loan at a premium or take it through legal process (which is rare today).
We do not deal with tenants, toilets, termites, 2 am floods or roof leaks. All the conversations go through a servicer.
7e investments53 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.