Question: Fastest and safest way to grow from 10 Units to 100 Units?
Please put your take on how to GROW a buy and hold portfolio 10x.
I'm interested to hear what others have to say about this. For me it is growing slowly and steady and slowly increasing the unit size that you are doing.
There are many ways to grow fast...including but not limited to...
To me though, and this is coming from someone who grew from 4 to 64 units in about 5 years, it’s not how fast you grow...it’s how fast you grow while gaining good chunks of equity.
If I could do it over again I’d focus on using the BRRRR strategy. I’d buy and rehab with private money and refi with small bank debt.
By using no money down seller financing I have built an empire of debt with little equity. I mean...I have a chunk of equity at this point but I’d have way more had I used the BRRRR strategy .
4 green houses = 1 red hotel?
I think the fastest way would be to join a syndication and support them in some capacity or find some partners where you can focus on adding value in the MF syndication space. You can then be part of the GP side of the deal and work your way into more equity through your own efforts plus you'll also want to add your own capital to align w/investors.
Buy pre-forclousre with subject to.
Low money down
Cash flow positive if the numbers work.
No financing needed.
And most important point to build wealth is not to sell anything.
Learn this Sol Goldman.
I’d say partnerships and larger deals. I plan to start with single family rentals (I’m doing this currently), then small multi family or commercial (4-10 units) and in 15 or 20 years do 20 plus unit deals.
Either start syndicating or develop the 90 units. This is where maximum leverage, equity, and residuals are built in. Buy the land/JV with the land owner. Pay for entitlements then get construction loan to build. When finished, you'll have 30%+ equity immediately and the whole process shouldn't take more than 36 months. 5 years ago we bought land for 500k, spent 4 million to build and exited at 9 Million 2 years later. That was a 70 unit. Cash out of pocket was $500k.
@Rob Chiang This year my business partner and I did pretty much exactly what @Brandon Hicks described. We purchased 16 buy and holds, rehabbed them, and then refinanced them through a small local bank in Phoenix, Arizona. So far we have rented out 8 of the 16 to end buyers with lease options. We have 4 more on the market and we have 4 more in the stages of rehab.
So far this model is projected to create over 400k equity and cash flow for each of us over the next 5 years. We have about 120k of our own money into the deal that we are planning to get back out by selling 5 5-year second position performing notes at 11-12%. This way we will be able to get all of our money back out of the deals and we can get a passive investor a good rate of return.
We plan to follow this model for the next few years up to around 70 units. In 5 years we should have some people exercising their opinions which we will probably 1031 exchange into larger deals. That is how we plan to scale up over the next few years.
I would say that the BRRRR method or just straight up partnering (like with syndications and what not) are the best ways for rapid growth.
Two words, Grant Cardone.
Really depends which route you'd rather take, I want to BRRR the affordable SFR route until it's feasible to create my own property management team and acquire portfolios along with individual properties to scale. I'll agree, MFR has the economy of scale which SFR doesn't but, I feel like SFR is more safe and liquid with a bigger pool of buyers but, this could also be my limiting belief. Until I have my mind changed or win the Mega Millions this is my way safe and fast way.
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