Portfolio Exits

5 Replies

Any success stories regarding exiting a portfolio of rental properties? Specifically single family home rentals?

I've seen some stories of buying apartment buildings, increasing occupancy, renovating, etc and then exiting.

Has anyone bulilt up and acquired a portfolio of rental single family homes and then exited?

Just curious to see if any investors have seen a successful business model in path and wanted to come in and acquire the properties for the cash flow and bought a number of homes at once.

Thanks.

@Francis Longo interesting question, I'm anxious to hear the responses on this

@Joe Fairless My gut is telling me that its somewhat difficult/different to underwrite a portfolio of single family rental properties the way you would underwrite a multifamily portfolio. But if someone had, for example, 50 single family rental homes, in Texas, were they able to sell a portion of the homes or all at once?

I'm fully aware that single family homes are sold based off of comps...square footage, bedrooms, bathrooms, size of yard, neighborhood, etc, not like a multifamily development where it is valued off of the net operating income divided by a cap rate.

Just wanted to see if any investors here had experience amassing a portfolio of single family homes and then exiting it.

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There is a poster here on BP, though I can't remember who though, that mentioned he was the portfolio buyer of 30-40 properties from an individual seller, so I'd say the answer is yes.

I think generally though the more common path this takes is this:

  1. You're starting out and begin with SFR/MFR properties.
  2. You either transition into small commercial MF properties, or decide you would prefer to begin to operate in the commercial space.
  3. You begin to sell individual homes and roll those profits into a new acquisition in your new target space.

I myself am at #1 there. Whether I transition to #2 and #3 will depend on factors I don't have at this point like where I am 5 years from now geographically, financially, family wise and goals at that point. But I would likely not want to sell the portfolio as a whole IMO because there will be a reduced number of buyers (only other investors) that those homes would appeal to. My goal would be to sell them individually hopefully to OO that would pay the most for them giving me the most cash possible to invest into whatever my new choice of investment was at that time.

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