SFH Portolio vs. Individual Acquisitions

5 Replies

Hey BP SFH Pros! We have been bouncing around ideas of investing out of state because seeing any possibility of buying "investment" property anywhere near our home (SF Bay Area) seems unlikely. It's bananas here (as others have posted) for SFH and Multifamily - multiple bids on every property we are interested in.

I'm curious to hear feedback from BP members with a large SFH portfolio (outside of the state they live in). We're looking into Ohio, Tennessee, Nebraska markets. Our goal is to buy 25-30 homes over the next few months with goal of 100+ within a years time. We have about $1.5M to put to work now with an additional $3-4M to put in a few months.

Any feedback on the pros/cons of this setup?  

How is your experience using local prop management companies? 

Buying a portfolio of homes vs. hunt and peck individual ones at a time?

Any recommended portfolio lenders?

Devils advocate...why not Multifamily? Why do you like your SFH portfolio?

We're liking the numbers a SFH portfolio like this can generate (when buying the right houses) compared to the variety of other options we've evaluated: DST, TIC, NNN, Multifamily, OZ. Any and all feedback would be greatly appreciated.

-Dean

Originally posted by @Dean B. :

Hey BP SFH Pros! We have been bouncing around ideas of investing out of state because seeing any possibility of buying "investment" property anywhere near our home (SF Bay Area) seems unlikely. It's bananas here (as others have posted) for SFH and Multifamily - multiple bids on every property we are interested in.

I'm curious to hear feedback from BP members with a large SFH portfolio (outside of the state they live in). We're looking into Ohio, Tennessee, Nebraska markets. Our goal is to buy 25-30 homes over the next few months with goal of 100+ within a years time. We have about $1.5M to put to work now with an additional $3-4M to put in a few months.

Any feedback on the pros/cons of this setup?  

How is your experience using local prop management companies? 

Buying a portfolio of homes vs. hunt and peck individual ones at a time?

Any recommended portfolio lenders?

Devils advocate...why not Multifamily? Why do you like your SFH portfolio?

We're liking the numbers a SFH portfolio like this can generate (when buying the right houses) compared to the variety of other options we've evaluated: DST, TIC, NNN, Multifamily, OZ. Any and all feedback would be greatly appreciated.

-Dean

I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

https://www.biggerpockets.com/blog/core-four-real-estate-team

I invest and work in Columbus, Ohio.

@Dean B. there is not a lot of benefit to buying a bunch of SFR's, but that is just an opinion...I recently sold an 12-property portfolio of SFR's and the buyer was perfectly happy with the purchase...me, I would work on MF acquisitions solely...it's really the concept of scalability and ease of management....one location, one roof, one property manger...

I own both...the SFR's have been stable and perform well...but nowhere near as well as the MF formula of improving condition, increasing rents, and reducing operating expenses...it's simply magical and doesn't exist with SFR properties.

Great points and I agree with a lot of them. I think we've just soured on MF here locally so we're exploring formulas in SFH. How are MF in Ohio area? If you happen to have any leads on bigger MF properties, please let me know. We are open to all options.

Originally posted by @Dean B. :

Great points and I agree with a lot of them. I think we've just soured on MF here locally so we're exploring formulas in SFH. How are MF in Ohio area? If you happen to have any leads on bigger MF properties, please let me know. We are open to all options.

 Multifamily in Columbus, Ohio is booming! The bigger ones are tougher to find.

@Dean B. I think its really a matter of the availability of the structures you are looking for...we mapped every parcel in Columbus, Cleveland, and Cincinnati and found an interesting ratio and concentration of between 20,000 and 25,000 structures that have a land use code consistent with multifamily...all 3 metro areas have about the same number of people...and I suspect this pattern holds true in a lot of metro areas...

I guess the point is the effort needs to be sourcing a deal "off-market"...a bit of strategy can produce the property you are looking for....there are some other building patterns we would with the Low Income Housing Tax Credit program...do you have an idea on the unit count you are looking for?