Reached 15 Units Owned...Now What?

Commercial Real Estate Investing

Reached 15 Units Owned...Now What?

Investor · Almont, MI · Member since 2015 · 360 posts · 302 votes

Over the last 4 years with the help of the amazing BP community, I've been able to build my portfolio to 15 residential units. But I realize that this is still at a "mom and pop" level not big enough to hire a staff, dedicated maintenance team, etc. but big enough that I know I want to grow, quit my full time job and dedicate more of my time to my investment business. It feels like I'm in the bit of a no-man's land at this level...not a newbie but still pretty much a small fry.

So I'd like to ask for some advice from BPers on where I should go next with my business.

Should I buy a bigger multiunit with commercial financing...is buying a mobile home park a better investment than a traditional multiunit...is a commercial property (strip mall, office building, NNN) a better bet...is it time to look at becoming an HML or buying notes rather than dealing with more toilets...start a property management company and take on clients...heck I'm wondering if buying a franchise business outside of RE is something I should look at?

I know that any and all of these have their pros and cons but I really would like to hear what some of the seasoned BPers believe have worked the best for them in taking their businesses to the next level!

Can't wait to hear your opinions on this!! Thanks!

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Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes

7y

@Dante Pirouz . Congratulations on taking action and scaling up to this level. What you should do really depends on what your goals are short term, mid term and long term. When you wake up in the morning, what does your passion.

One thing you can start doing is the process of delegation: Write down the things you perform daily on your business so that someone else can do it (as well as you would do it), while you focus on other things.

As you grow (which ever direction it is), you want to leave the little stuff to others, while you focus on higher impacts tasks. This step, you should do regardless of which direction you chose to go with your business. You don' t need to hire a full time staff to perform the work. You can hire freelancers on various sites.

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Brett Goldsmith
Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes
7y
@Dante Pirouz Are you spending any money on marketing or how are you finding these opportunities? Have you considered doing any rehab projects to build additional capital? Keep searching for those golden eggs and structuring deals that will add a massive wealth surge to your portfolio.
1 Reply
Dante Pirouz
OP
Investor · Almont, MI · Member since 2015 · 360 posts · 302 votes
7y
@Ayne C. Yes I've read The 4 Hour Workweek which helped me even imagine life outside of the 9-5!
@Brett Goldsmith I don't market for deals other than networking to meet sellers and culling through all the listings in investment grade areas nearby. Finding good deals is not at all a problem in Michigan! There are WAY more deals that I have to turn away that are excellent money makers and there is only a limited amount of competition for the deals. It makes me crazy to say no to a potential deal because of limited cash...I guess that's why I am at this crossroad...need to learn how to share the opportunities with more partners.
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Dante Pirouz
OP
Investor · Almont, MI · Member since 2015 · 360 posts · 302 votes
7y
@Scott Morongell Your advice is spot on...I agree that getting over confident is a fast way to get your cash flow into trouble! I also agree that sticking to multi at this point given the learning curve I've already been through makes a lot of sense. Maybe partnering with someone down the road who has done strip malls or mobile homes will allow me to make that jump in the future.
@Suly B. YES!! I actually have wanted to find a dedicated CPA/bookkeeper with RE experience to do this cost segregation. Do you have any suggestions? I'd love to find a virtual accountant/bookkeeper who specializes in RE investor books.
@Jay Helms I think just being able to choose when and where we work is the most important feature of doing this business. Right now I commute 4 hours a day to teach at Michigan State which is my W2 and it just doesn't make sense to me anymore! I blew out my poor BMW X3 engine last week with all this driving back and forth and it has hit me for a while that there has to be a better way!
Also I just joined this month a new Mastermind group of BPers which is great and definitely motivating...I don't want to not deliver in front of them.
1 Reply
Yonah WeissPro Member
Cost Segregation Expert and Investor · Lakewood, NJ · Member since 2017 · 1k+ posts · 1k+ votes
7y
@Dante Pirouz Congrats on your success, and I think you've gotten some amazing advice thus far. As per the virtual accountant you mentioned in your last comment. You should reach out to @Daniel Hyman this is exactly what his firm does.
2 Reply
Scott Morongell
Investor · Charlotte, NC · Member since 2017 · 791 posts · 479 votes
7y
Originally posted by @Dante Pirouz:

@Scott Morongell Your advice is spot on...I agree that getting over confident is a fast way to get your cash flow into trouble! I also agree that sticking to multi at this point given the learning curve I've already been through makes a lot of sense. Maybe partnering with someone down the road who has done strip malls or mobile homes will allow me to make that jump in the future.
@Suly B. YES!! I actually have wanted to find a dedicated CPA/bookkeeper with RE experience to do this cost segregation. Do you have any suggestions? I'd love to find a virtual accountant/bookkeeper who specializes in RE investor books.
@Jay Helms I think just being able to choose when and where we work is the most important feature of doing this business. Right now I commute 4 hours a day to teach at Michigan State which is my W2 and it just doesn't make sense to me anymore! I blew out my poor BMW X3 engine last week with all this driving back and forth and it has hit me for a while that there has to be a better way!
Also I just joined this month a new Mastermind group of BPers which is great and definitely motivating...I don't want to not deliver in front of them.
Appreciate your response. Yes, I believe multifamily is a favorable option for where the market is currently at. That being said, proper underwriting and discipline must be present. Operators who leave their rosy red glasses on and underwrite like they did in 2013 will be very sorry when the market shifts and they can no longer meet expected pro forma numbers.
1 Reply
Charles Kao
Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
7y
@Dante Pirouz
I would transition to property management so you have more time to focus on growth and what strategy you want to implement. I assumed you were without but you have enough properties to leverage a PM for a good deal and I'd start by giving them one and see what they can do before giving all. We are implementing a similar strategy at 18 units and since have put a multi and a storage facility under contract with 3 more offers out. We likely with sell off our small multis to focus managing on our new business. It has been tough at times passing over really good small deals to go after bigger ones but worth it and the investors we have passed off our smaller deals to have offered to become passive investors in our bigger deals as well. Reach out if you'd like to chat. I feel like you are right where we were at a year ago.
2 Reply
Ellie Perlman
Multifamily investor · Boston, MA · Member since 2017 · 281 posts · 521 votes
7y
@Dante Pirouz - there are many advantages to buying multifamily properties: they are easier to finance and you enjoy economies of scale. I started with multifamily and skipped the single family phase and it has been working great for me. If you feel that it's a bit above your comfort zone, partner with someone who is more experienced and learn this way, plus get a peace of mind. Scale. Go for it!
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