Rental Property Investor · Springfield, MO · Member since 2019 · 86 posts · 35 votes
Howdy Guys!
There's that age old debate on here on if you had $100,000 would you buy a single home or would you put 20% down payment on 5 100,000 homes. Most of these are talking about raising capital to be able to get to $100,000.
How large does this idea scale? Is there a theoretical $$$ amount that says above or below X amount, it would be advantages to do one over the other?
If someone had a rich uncle who had 1,000,000 would there be a, "buy and apartment complex?"
Personally, my gut tells me that BRRRR is the way to go in all the stuff here in the midwest i've been running numbers on. It got me wondering about the big boys and if they played by different rules.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
It would probably be buy an apartment complex that can be rehabbed and refinanced, so same principal, however with scale like that it is quite difficult to simultaneously manage 50 rehabs, or even find 50 properties that are good candidates for BRRRR. Thus many times a property not requiring a large rehab is a good alternative to the money sitting in the bank.
Rental Property Investor · Kansas City, KS · Member since 2016 · 114 posts · 57 votes
6y
Hey man to avoid getting duped with that money I would probably take part of that and invest it with a sponsor in the area you want to invest in and learn and make money!
OR
You take that and buy and live in a 4 unit building and learn from there!
theres a lot of different paths to take!
From there, it will probably be a little bit easier for you to probably branch out and start doing and owning your own deals! Just my 2 cents! Good luck To you bro!!!! Keep in mind you don’t have to start small but you need SOME kind of experience so you can build some confidence going into deals!
Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Hugh Carnaha I think it depends on what your investing goals are and what is the highest and best use of your time. Personally, I needed cashflow quickly to replace income and I had limited capital to make that happen. Even though I started in turnkey, I intentionally started switching up strategies to BRRRR. Now I'm in scale mode and harvest my equity now to MF. You don't have to pick just one strategy... moreover know where you are heading.
If you had $1M:
- Bought 10 $100K homes cash, you might return ~5-7% on your money
- Bought 50 $100K homes with leverage (I know 50 homes at 80% LTV is a stretch), you could pull in $120K COC a year at $12%
- Use that money to invest BRRRR, you could pull in $200,000+ (infinite returns if you could find all 70% deals.
Personally, if someone gave me $1M, I would build a portfolio for myself that generates an initial layer of cash flow, and then invest in into syndication deals (MF, MHP, SS, etc) to be in different markets and asset classes and take my time back immediately as I have a small child at home and want to travel more and show her the world.
What is your highest and best use of your time and your investing goals?