Bad Time to Start?

[Marcus McGhee]

Augusta, GA is a metro area of about 500k people and an economy powered mostly by government, healthcare and some manufacturing. Starting about a year ago going through next year we have about 1,000+ new units becoming available in the form of large multi-family complexes. 

This is probably true for many areas. It seems like two things are going to happen in the short run: Older smaller multiplexes are going to be harder to rent, you'll have to lower your rent price to fill them. I'm considering buy and hold strategy specializing in duplex to fourplexs and I'm trying to learn everything I can, but is now a bad time to start? 

[Account Closed]

While getting in the game is important, you bring up a good point. The MF cycle in most markets is nearing the top of the current cycle. There are a lot of units coming online, although most metros have absorbed them well.

If you are going to finance your deals with 30-year debt, you should be fine if you buy good deals. I personally would be a little cautious if buying anything 5 units + right now with debt that would expire in 5 years. Unless you see tremendous NOI growth in the next few years, you'll likely be a position of higher caps and higher interest rates in 5 years which will make a refi or exit potentially difficult.