Should a newbie investor avoid Large Multi-Family?

[Jordan Becker]

I'm in my mid-50's and just getting started RE investing (haven't yet bought my first investment property). I'm feeling pressure to scale up cash flow quickly because of my age -- so I'm considering jumping right into large multi-family as a way to do that, rather than starting out with SFH or small multi-family to gain experience first. Is that foolish? I understand large multi-family can be a lot of work and has different sorts of problems than SFH and small multi-family. I also have a full-time professional career that takes quite a bit of my time (which I don't want to give up just yet), so worried about biting off more than I can chew. Should I just stick with SFH or small multi-family to start off with? Thanks in advance for any advice.

[Arn Cenedella]

@Jordan Becker

I spent most of my life as a real estate broker and investor in Silicon Valley. My office located in Menlo Park CA. At one point I owned a bunch of units down on Ponderosa in Sunnyvale near Sunken Gardens Golf Course but moved to Greenville SC in 2014.

A few points, I am 66 years old, financial secure actually financially free but I still invest and I invest for the long term. While 55 might feel old, truth is life expectancy has increased such that you can plan you have at least another 30 years to invest and even more importantly you need to invest and produce income for the next 30 years to maintain a comfortable lifestyle.

So there is plenty of time to get it done. That being said, a mistake now unlike at mistake at 30 will be a big problem.

As @Charles Seaman mentioned, best approach would be partnering with other more experienced investors who know how to own and operate multifamily properties and learn as you go while reaping the investment returns.

You can invest either actively in a Joint Venture or passively in a syndication.

Due to the compounding impact of investment when done properly - investing $50,000 a year every year for 10 years should provide the income you need at 65 let's say. Living and working in Silicon Valley, it is possible you have assets in your 401K that can be moved to real estate. Disclaimer: I am a strong advocate of diversification - I am not saying move all your assets to REI rather consider moving a portion of assets into REI.

Work on education, investigate markets outside CA to invest - I suggest Southeast or perhaps Mountain West, select a few markets you like, and then network like crazy to find investors looking to partner.

Hope this provides some insight and value.