Do I sell it all and call it a day??

Question

BP,

I've been wrestling back and forth on whether or not I should sell my entire multifamily portfolio and get out of the game, so I figured I'd throw a post on here to get a little insight!

My current portfolio consists of 160 multifamily apartment units, over the course of a 10 year period it has taken a lot of hard work and sacrifice to get to the point of where I am.

Most of my portfolio is mainly B class properties, with some A class properties mixed in. All in decent/good locations. All properties have been managed very well over the years and currently has a great tenant base with no vacancies.

The main reason of potentially wanting to sell is that the maintenance calls are starting to wear on me. I manage all these properties by myself and it just takes a toll dealing with 160 people on a daily basis. I've went down the road with a management company before, and I refuse to go back down that road. It is what it is, other people don't manage or treat the properties like the actual owner. It is essentially, my baby.

I am also only 37 years old. Which I'd like to think is still a fairly young man lol. So do I hang on for 5 more years or so? I still do enjoy the game of chasing deals, it is what really keeps me going and gets me excited, but managing after the fact has just turned to wearing on me a bit.

Also, most of my property is based in Illinois (it is my backyard) and the taxes around here are brutal. It's just not the best state to be invested in, as I'm sure you all know.

I would absolutely miss the cash flow aspect of it though, getting re occurring income every month is definitely something I weigh in not to sell.

I would prefer not to go into numbers on here, but if it comes down to it, I will. If inboxing me is better to get into the numbers game, feel free to do so!

I know that is all fairly brief, so if there's any other questions, feel free to ask! I appreciate all the feedback!

Andrew Freed · Answer

@Stephen Jones - I truly think your issue is you are not utilizing leverage and delegation effectively. You can build an entire property management company pennies on the dollar if you hire internationally and yes, it will take from your profit, but it will buy you back time. I recommend reading Buy Back your Time, amazing book and all fundamentals you should be utilizing given the size of your portfolio. I personally think if you hold and learn how to leverage others, hire right and delegate effectively, you will be much happier and richer in the long run. I personally own over 400 doors and have done this across my portfolio so I'm talking from experience. Feel free to reach out if you want some best practices.

Dave Charron · Answer

I agree with Andrew, your definitely at the point financially where you could hire a maintenance guy to cover service calls, turnovers and regular upgrades to the properties.  For admin help you could get part time if needed.

This should take some of that stress off your table.

Jamie O'Connell · Answer

I would say you've worked so hard to build it up and I assume it's a great margin that you should hold on. I would say if you make a good amount I would go about hiring a specific person to do what you do. So if your making 20k a month in profit (just an assumption but using for a point) spend 5 - 7 k or something a month and hire someone full time to do what you do so your making 13k a month but its 13k a month that is truly "passive".

Still a very solid income. You know your numbers better than anyone but thats what I did. I hired someone who handles everything and just comes to me when it's something big aka we need to evict or need a new roof etc etc. so while I make less a month, I do nothing for that income.

Chris Howell · Answer

Definitely Agree with Andrew. Its time to hire a maintenance man and a manager.  Spend 6 months teaching them your system and automate the repair request that go straight to your handyman and keep your phone from ringing.  This still keeps you active and in the business with the parts of investing you love and you can still keep everything running the way you want.   Spend the money to take the 160 headaches away.  You will just have 1 to 2 headaches to deal with.   Congratulations on 160 Doors.   I am in process of trying to switch from SFR to multi family.

Theresa Harris · Answer

Why not get a handyman to help with the service calls (doesn't have to be full time, but as on call basis)...or a couple you can rely on?  You have a lot of properties, so sit down and figure out which ones are more problematic, will have upcoming large expenses (eg new roof in 2-5 years) and aren't performing well.  Also if you sell, you should have some cash from the sale that you can invest elsewhere.

Stephen Jones · Answer

@Andrew Freed- Great advice. Thanks for the message and congrats on the 400 doors! That's saying something man!

Demario Scott · Answer

I'm located in the Southern Illinois area and me and my brother are very handy. I'm well versed with horizontal construction and he is more vertical HVAC, renovations and such. We are both actively searching to be more involved in the real estate realm and would certainly be able to help with tenant request or even finding solid contractors.

Melissa Thompson · Answer

Selfishly I wish I was in your shoes....i think you should hang in there, take advice from those who have been there before. Good luck!

Alecia Loveless · Answer

@Stephen Jones I have a portfolio 1/5 the size of yours but have a handyman to deal with the maintenance issues. This frees me up to do the parts I enjoy including leasing, tenant relations and buying new deals.

I strongly recommend you figure out how to focus more on the parts you enjoy and spend less time on the parts that you’re “over”.

Yes, your cash flow will be affected if you hire someone to help, but if it allows you to stay in the game another 5-10 years or indefinitely you will reap the benefits of mortgage pay down and appreciation.

Do I sell it all and call it a day??

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