Buying Multiple Rentals a Year

15 Replies

Hey Guys,

Something that perplexes me after listening to the podcasts and perusing the forums is that someone can purchase multiple, if not tens of properties in a single year. I simply cannot wrap my mind around it. 

From what I can determine, these folks are working a regular job with personal houses, families, etc. and aren't rolling in dough.

So BP, how do these individuals do this?

I would caution you to not believe in all the hype. Yes it can be done, but the opportunity to make mistakes is huge. I would look for a good first deal to get your feet wet, get a quality tenant in place, take a breath and start to look for a second place. I would recommend a minimum of 6 months reserve on each property. Stuff will happen. Good luck! 

First let me say the most I have ever bought in one year is 5, and that was before the crash when financing was different. I think you should break it in to two parts: (1) Finding deals and (2) Financing them. If you can find enough deals in your target markets, and get creative about financing it can be done. I was also warned to be caution and really did get in a bit over my head, but as I look back I do wish I had bought almost everything that was on my prospecting list.

Originally posted by @Scott Carder :

I would caution you to not believe in all the hype. Yes it can be done, but the opportunity to make mistakes is huge. I would look for a good first deal to get your feet wet, get a quality tenant in place, take a breath and start to look for a second place. I would recommend a minimum of 6 months reserve on each property. Stuff will happen. Good luck! 

 we purchased 7 last year. i think in 2014 we purchased 6.

we have regular jobs, very busy jobs. have kids, no family close by. and the wife travels a lot, so at times its just me.

to me, investing in RE is an addiction.

I bought my first duplex in November of 2014, and 3 more duplexes in 2015. I am hopefully going to buy a couple more units this year. 

I am noticing a pattern here...

Nobody is investing in California properties!

How does one go about buying multiple properties? Not that I am trying do this, but just for my sake of understanding.

Originally posted by @Daniel Erdman :

I am noticing a pattern here...

Nobody is investing in California properties!

How does one go about buying multiple properties? Not that I am trying do this, but just for my sake of understanding.

 Daniel-

I have a few clients who own multiple investments in California. There are deals if you look. Most of my investors started with cash. They bought small properties all cash & RE-financed to conventional after buying. They have been investing for a long time and use multiple lending companies for their loans

@Daniel Erdman it can be done, even in CA. But buying multiple properties in one year requires a system, a team, and experience. Sure, there are the outliers that have purchased multiple properties while working a full time job but those stories are either very rare, overstated, or in many cases, will underperform because the lack of the things I just listed resulted in the accumulation of a portfolio of what will someday reveal themselves as lesser quality deals than the buyer originally thought.

The most CA properties I've bought in one year was somewhere between 100 and 150 but I've been doing this for 25 years, have a staff of acquisition, project management, asset management and accounting staff...and this IS my full time job.  And most importantly, that was at the peak of the foreclosure crisis. Nowadays deal flow at that scale is unachievable (at least quality deal flow).

@Daniel Erdman It can be done and I couldn't agree with @Brian Burke more that it requires a system. I started investing in Aug 2010 and I think the first 12-18 months, I did 5-7 deals and since then I have done around 250 deals, but you need systems and a team who can follow the systems.

Scaling up their business is one of the hardest challenges people face in their business. In order to do that, I believe you need to have people on your team doing things better than you can do those things.

I have a friend who recently sold his business to his brother, and has used that cash as a down payment on approximately 40 units in the last 6 months. He had about 15 units prior to that so he now has like 55-56 total. This is probably a rare case, but it can be done.

If you buy the "Guru" package, deals are placed on your doorsteps (I wonder if someone has "guru" as their keyword). I always believed in quality over quantity. As @Sharad M. said in the recent podcast, after you start doing 1,2,3 deals and building those quality relationships, the rest of the deals will soon follow. Remember, REI is a marathon not a sprint and relationships are key. Having a quality team (lender, agent, attorney, etc.) is probably the most important piece of doing business in this industry. Always start with one, and the 100th will come before you know it.

Good luck! 

Originally posted by @Damir Kamber :

If you buy the "Guru" package, deals are placed on your doorsteps (I wonder if someone has "guru" as their keyword). I always believed in quality over quantity. As @Sharad M. said in the recent podcast, after you start doing 1,2,3 deals and building those quality relationships, the rest of the deals will soon follow. Remember, REI is a marathon not a sprint and relationships are key. Having a quality team (lender, agent, attorney, etc.) is probably the most important piece of doing business in this industry. Always start with one, and the 100th will come before you know it.

Good luck! 

Damir,

You are correct when you say that this business is nothing more than relationship business. Of course, you are buying real estate, but it's the relationships that will help you scale your business.

A journey of 1,000 miles begins with a single step.

Best wishes,

Sharad