Multi-Family and Apartment Investing

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Steven Hayes
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Selling Our Home With Lots of Equity to Invest in Cash Flowing

Steven Hayes
Posted Jun 25 2022, 15:44

Hello BP Group, 

My wife and I are thinking we are going to put our home up for sale soon. We will have nearly 1 million in equity left over to invest. Our goal is to not have to work full time at our 9 to 5's. Looking for recommendations on how to generate the most amount of cash flow with this amount of cash we should have available. We have some SFH now, but looking at purchasing a large apartment complex. Seems like the route to go. Any input would be great.

Fort Worth, Texas

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Jason Sung
  • Investor
  • Dallas, TX
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Jason Sung
  • Investor
  • Dallas, TX
Replied Jun 25 2022, 16:13
Quote from @Steven Hayes:

Hello BP Group, 

My wife and I are thinking we are going to put our home up for sale soon. We will have nearly 1 million in equity left over to invest. Our goal is to not have to work full time at our 9 to 5's. Looking for recommendations on how to generate the most amount of cash flow with this amount of cash we should have available. We have some SFH now, but looking at purchasing a large apartment complex. Seems like the route to go. Any input would be great.

 Hi @Steven Hayes have you thought about investing in self storage units? I think it can be another option for cash flow. I am new to self storage investment as well and learning daily.   

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Steven Hayes
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Steven Hayes
Replied Jun 25 2022, 16:22

Hey Jason. 
I have thought about it some. Just don’t know much about it. Or how recession proof they etc. Would love to learn more though. 

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Rodney Sums
  • Laveen, AZ
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Rodney Sums
  • Laveen, AZ
Replied Jun 25 2022, 16:31
Quote from @Steven Hayes:

Hello BP Group, 

My wife and I are thinking we are going to put our home up for sale soon. We will have nearly 1 million in equity left over to invest. Our goal is to not have to work full time at our 9 to 5's. Looking for recommendations on how to generate the most amount of cash flow with this amount of cash we should have available. We have some SFH now, but looking at purchasing a large apartment complex. Seems like the route to go. Any input would be great.


 Apartment complex or a few 4 units, all cash is what I would do too if you just want to stop having an employer right now. Either of those should get you off the clock.. unless you're wanting a big pimping, lavish lifestyle. Then you may want to invest in bigger ventures

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Bjorn Ahlblad
  • Investor
  • Shelton, WA
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Bjorn Ahlblad
  • Investor
  • Shelton, WA
Replied Jun 25 2022, 17:05

@Steven Hayes my 12 unit is a lot more profitable than my duplexes measured per dollar invested. The more doors under one roof the better. If you plan on self managing get something decent that will require less time; but gives you an opportunity to improve the place and get higher rent. The lending and qualification process is very different once you get above 5 doors. You will need around 25 doors minimum to look at getting rid of your job. Also look into full time REI that is a whole different income tax structure. Talk to your accountant. All the best!

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Arn Cenedella
  • Rental Property Investor
  • Greenville, SC
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Arn Cenedella
  • Rental Property Investor
  • Greenville, SC
Replied Jun 26 2022, 04:52

@Steven Hayes

A few comments and items to consider.

1. Not all decisions are solely financial.
There are non-financial benefits to owning a home.

If you sell your house, where will you live? Do you buy another residence? Do you rent?

The cost of your housing should be considered as part of the entire financial analysis.

2. Only $500,000 of gain from sale of residence is tax free. Be sure you understand tax implications of sale. Do you end up with $1M cash after paying any taxes due? $1M might buy you $3M to $4M of real estate. What is price per door in your area?

3. If you leave your W2s, be sure to consider the cost of health insurance - that might cost the two of you $20,000 a year.

4. In this market, one might reasonably assume a 6% cash on cash return from a MF deal.

$1M brings $60,000 a year.

I believe a couple probably needs $120,000 a year income to live a nice upper middle income lifestyle. And this number may not include the cost of health insurance and assume little or no housing or auto cost.

Do you other rentals produce the other $60,00 you will need?

No one can answer this question for you. I am just providing items you should consider and I may have missed a few.  Good luck with your transition.

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Paul Smythe
  • Investor
  • Greenville, SC
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Paul Smythe
  • Investor
  • Greenville, SC
Replied Jun 26 2022, 10:24

@Steven Hayes it'll be hard to truly retire with "only" $1 million. As Arn said, it's maybe $60k/year, which is very good, but not something you're likely to retire off of.

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Evan Polaski
  • Cincinnati, OH
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Evan Polaski
  • Cincinnati, OH
Replied Jun 27 2022, 06:34

@Steven Hayes. Arn brings up many points to consider.  The other one is risk of your investment.  You may have seen this already with your SFHs, but where many people talk about cash flow are really just transferring risk.  

Class C areas pencil to better cash flow, if you don't account for additional turn over, additional deferred maintenance, typically a tenant base that is "harder" on units, and in general a potentially lower income tenant that you will collect little, if any, damages from if they destroy the place.  Especially when you are living off this income, a 20k repair bill just took you $60k income to $40k.  Plus reserves are a higher percentage of rent: i.e. roto rooter isn't charging you less for a drain line clog just because you can only rent for $900/mo vs $1,800/mo.