Realistically; has anyone gone from ie. 16 to 32-64-100 unit's?

Question

I'm wondering who has implemented a 'Grant Cardone' methodology throughout their REI journey and/or does or has it worked for you similar to his teaching's.

Have you actually been able to buy, hold for 3-5 years and sell at a 150% increase in value from original purchase and then go on to a twice the unit's purchase for your next property?

Basically, I suppose I'd just like some validity to this "double-up" approach and is it tried and true to "normal" REI's?

I welcome and appreciate all stories of who are willing to share their REI commercial MF journey. Thanks in advance!

Chihiro Kurokawa · Answer

It took me over two years but I went from zero units to passively investing in 114, then closing my first deal, a 128 unit last week. I have three very experienced partners on my deal.

Dave Foster · Answer

@John Lenhart, You're exactly right.  If @Allyssa McCleery wants to do a 1031 to defer tax on the gain from the sale of her real estate she would need to use the services of a QI to document the process and hold the proceeds.  But you're a little off on the cost - you're over paying :)  Here's a recent blog we wrote for BP on average nationwide costs for a regular 1031:

https://www.biggerpockets.com/blog/how-much-does-a-1031-exchange-cost

Brian Adams · Answer

Account Closed yes, I went from buying a duplex to closing 550+ unit deals.

You can checkout my story here:

I quit my CPA Job to buy Large Apartment Buildings

John Lenhart · Answer

Never studied Grant Cardone, but that is how we built our portfolio of a couple hundred units.  Started with a 4 family. Used a number of 1031's to get larger properties. So yes, the principle works

Jay Hinrichs · Answer

I have a client in Oregon that did that exact thing over about a 15 year span.. they got to a fabulous Oregon solid B to B + 60 units.. then for some reason let their broker talk them into selling it since it went up a bunch.

and 1031 into a 300 unit C class in OKC.. well one year in they were in risk of losing it.. needed to move there lived there for 4 years straightening it out and finally sold it came back to Portland bought a nice 20 unit and a condo on Maui LOL

John Lenhart · Answer

@Steve Sell - 2 reasons why larger is better. 1) you get better economies of scale. Only one manager is needed for 100 units and they are a lot easier to manage if they are under one roof or one location than if they are spread across town.  You have fewer roofs, fewer mechanical issues (for the most part). It is easier to run a 40 unit location than it is to run ten 4 families.

2) SFH, Duplexes and 4 families trade on a sales comp basis. Therefore, if you have the best 4 family on the block and your rents are 3x as high as your competitors on the same block, you do not get rewarded when you sell for your good management. Yes, you still get the increased cash flow while you operate, but you still trade for the comps that the neighborhood generates. With a larger building, you can get price appreciation if you have good management and financials.

These are the reasons why we traded out of your 4 family product. You mentioned you have a newer 12 plex. Give it a while, I bet you will see that the 12 plex is easier to manage than the SFH or even the 4 families.

Taylor L. · Answer

There are many ways to do it.

Story time: A friend is an Air Force veteran, young guy. He currently owns 45 doors (he & his wife, without investors) and is looking at buying another 20 right now. After that he's going to start syndicating and the numbers will get MUCH bigger. He built that portfolio with flips, brrrrs, quads, and small multis. I recently made a Facebook video with him, PM me and I can get it to you if you'd like to see.

I started as a passive investor in >400 doors, and recently closed 225 on the GP side.

There's a gentleman in my area who owns 400 units w/o investors, with about 65% equity. And it took him 30 something years.

Remember, Account Closed, Uncle G has been building his portfolio for, what, 25 years? 30? Over that span of time there are a ton of buying opportunities. Long term vision and commitment are wonderful, profitable things!

John Lenhart · Answer

@Allyssa McCleery In order to do a 1031, he will need to find a qualified intermediary who will I need to handle your funds at closing.  The long and short of it it is, that when you sell a building, and there is a delay on the closing of your purchase, you are not allowed to touch any of the proceeds you received upon the sale of your Original property. This is why the qualified intermediary is required. They hold the funds in escrow and provide the paperwork used to complete the forward exchange.

Dave Foster · Answer

@Allyssa McCleery, Welllll... It's what we do.  So I'm a little biased :)  But there are lots of QIs out there.  I'll send you an email with some resources that will help you choose wisely.

You can also talk to a particular title company that you like to use.  They will either have a national firm that they own or they will have a relationship with a QI firm like ours and refer us to you.  If it is a national QI firm that they don't have a lot of experience with your experience will only be as good as the sales agent assigned to you.  If it's someone that your closer has had direct experience with on numerous occasions you can start to feel like they'll be legitimately what you'll need.

Dustin Beam · Answer

I don't know how long it will last, but so far I'm in the beginnings of it.

I bought 12 units out of the gate. After 1. 5 years, I 1031 into 11 units of a higher quality. Almost twice the rent and profitability. So less doors, but I consider it doubling based on profit and property value even if the doors went down.

Just finished a cash out refinance after owning a little over 1 year.  Using that money, I will try to double again and I'll just have to see where I go from there. I don't expect to double every year or two, but I do hope to stabilize what I *hopefully* buy this year, refinance out and buy more within a couple years of the purchase.

If all goes well, I hope to own approximately 4x the property value of my first purchase after 4 years. As long as I can cashflow decently after the refinance(s), I'll consider it all a success. We'll see, it's  goal, not an eventuality.

Realistically; has anyone gone from ie. 16 to 32-64-100 unit's?

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