What scale can you get to when you self manage?
Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes
What scale can you get to when you self manage?
Most Popular Reply
Randall AlanPro Member
Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes@Austin Fowler
Hi Austin, we have 37 rentals we self manage. My best suggestion to you is to automate where you can. Our favorite automation tool is one of the cloud based Property Management systems out there. We use Rentec Direct, which costs us about $2 per door per month… but there are many out there and most offer a pretty comprehensive suite of features.
It collects our rent, deposits it to our bank account, applies late fees, allows for use of credit cards, screens our tenants, has a full accounting suite with reporting, broadcasts our vacancies on 20-30 websites, collects applications, lets our tenants report maintenance issues, and much more.
The 35-40 number has worked well for us. It’s not too busy, and we are able to travel regularly, including internationally.
We used traditional financing on almost all of our units. We had the advantage of buying between 2018-2021, when prices and interest rates were more favorable. It is just technically harder to achieve today if for no other reason the interest rates and run-up in prices from the Covid era. It has been getting better in my opinion recently. We didn’t buy any properties for about 2 years between 2021 and 2023, but have bought couple properties in the past 2 years.
All the best!
Randy
81 Replies
- 11moRandall AlanPro MemberInvestor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
@Austin Fowler
Hi Austin, we have 37 rentals we self manage. My best suggestion to you is to automate where you can. Our favorite automation tool is one of the cloud based Property Management systems out there. We use Rentec Direct, which costs us about $2 per door per month… but there are many out there and most offer a pretty comprehensive suite of features.
It collects our rent, deposits it to our bank account, applies late fees, allows for use of credit cards, screens our tenants, has a full accounting suite with reporting, broadcasts our vacancies on 20-30 websites, collects applications, lets our tenants report maintenance issues, and much more.
The 35-40 number has worked well for us. It’s not too busy, and we are able to travel regularly, including internationally.We used traditional financing on almost all of our units. We had the advantage of buying between 2018-2021, when prices and interest rates were more favorable. It is just technically harder to achieve today if for no other reason the interest rates and run-up in prices from the Covid era. It has been getting better in my opinion recently. We didn’t buy any properties for about 2 years between 2021 and 2023, but have bought couple properties in the past 2 years.
All the best!
Randy
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Randall Alan:
@Austin Fowler
Hi Austin, we have 37 rentals we self manage. My best suggestion to you is to automate where you can. Our favorite automation tool is one of the cloud based Property Management systems out there. We use Rentec Direct, which costs us about $2 per door per month… but there are many out there and most offer a pretty comprehensive suite of features.
It collects our rent, deposits it to our bank account, applies late fees, allows for use of credit cards, screens our tenants, has a full accounting suite with reporting, broadcasts our vacancies on 20-30 websites, collects applications, lets our tenants report maintenance issues, and much more.
The 35-40 number has worked well for us. It’s not too busy, and we are able to travel regularly, including internationally.We used traditional financing on almost all of our units. We had the advantage of buying between 2018-2021, when prices and interest rates were more favorable. It is just technically harder to achieve today if for no other reason the interest rates and run-up in prices from the Covid era. It has been getting better in my opinion recently. We didn’t buy any properties for about 2 years between 2021 and 2023, but have bought couple properties in the past 2 years.
All the best!
Randy
Thanks Randy, are all the properties located close to you or are they beyond easy travel distance? What happens exactly when a tenant reports a maintenance issue? Do you personally need to deal with emergency calls? Do you do any work on the properties yourself?
- Specialist · New Roads LA · Member since 2025 · 11 posts · 4 votes11mo
Hi Austin, I've been managing my own properties for many years, and as you know, property management involves many moving parts. I've always focused on the idea of building systems. Whether its for maintenance crews and vendors, leasing processes, rent collection and tenant communications.
Every property is unique, every portfolio is unique - so with a good system, you can absorb new properties and make everything work.
To build your system, it's good to focus on tools instead of one big platform. That said, I have been looking at AI. You can use it to build tools whenever you need one. Examples:
1. "Create a property management App for Lease Tracking"
2. "Create an App for my maintenance crew to take pictures and submit them to me easily"
3. "Create an App that allows tenants to pay online via Card or ACH"
4. "Write a lease for the tenant ... with these terms ..."
Cash Flow - With skyrocketing insurance and maintenance costs, and softening rent rates, I focus on getting my administrative costs as low as possible by using on-demand remote workers and building my own AI tool-chest.
Hope this helps
George
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @George Skondras:
Hi Austin, I've been managing my own properties for many years, and as you know, property management involves many moving parts. I've always focused on the idea of building systems. Whether its for maintenance crews and vendors, leasing processes, rent collection and tenant communications.
Every property is unique, every portfolio is unique - so with a good system, you can absorb new properties and make everything work.
To build your system, it's good to focus on tools instead of one big platform. That said, I have been looking at AI. You can use it to build tools whenever you need one. Examples:
1. "Create a property management App for Lease Tracking"
2. "Create an App for my maintenance crew to take pictures and submit them to me easily"
3. "Create an App that allows tenants to pay online via Card or ACH"
4. "Write a lease for the tenant ... with these terms ..."
Cash Flow - With skyrocketing insurance and maintenance costs, and softening rent rates, I focus on getting my administrative costs as low as possible by using on-demand remote workers and building my own AI tool-chest.
Hope this helps
George
I had not idea AI could build anything so advanced. Could you give me a specific example? A specific app you've built using AI? What kinds of properties do you hold in your portfolio? Are you still expanding?
- Specialist · New Roads LA · Member since 2025 · 11 posts · 4 votes11mo
As with any new technology there's a lot of tools to build Apps (and websites). I use Lovable.dev
Honestly, it's scary what AI can do.
Sign up for a Lovable free trial, and give it a command:
"Create a property management Lease Tracker Application"
Once it creates it, you can add features:
"Add functionality to manage Maintenance requests"
Or, something like "Create a Guest payment App for someone to pay rent online"
You can have it create listing pages, portfolio or property-specific websites.
Or, use ChatGPT by saying "Create a Louisiana Lease for the tenant ... with these terms..."
Imagine that you have a professional programmer sitting next to you, and simply telling them what you want.
I have owned and self-managed between 80-200 doors in Albuquerque, New York and New Orleans, I've always been out-of-state. As they say, necessity is the mother of invention.
Best
George
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @George Skondras:
As with any new technology there's a lot of tools to build Apps (and websites). I use Lovable.dev
Honestly, it's scary what AI can do.
Sign up for a Lovable free trial, and give it a command:
"Create a property management Lease Tracker Application"
Once it creates it, you can add features:
"Add functionality to manage Maintenance requests"
Or, something like "Create a Guest payment App for someone to pay rent online"
You can have it create listing pages, portfolio or property-specific websites.
Or, use ChatGPT by saying "Create a Louisiana Lease for the tenant ... with these terms..."
Imagine that you have a professional programmer sitting next to you, and simply telling them what you want.
I have owned and self-managed between 80-200 doors in Albuquerque, New York and New Orleans, I've always been out-of-state. As they say, necessity is the mother of invention.
Best
George
That's spectacular, congratulations. You said that you *have* owned? What do you currently hold? Are you in the process of selling assets off or still expanding? Loveable.dev sounds astonishing, do you have any links to any apps that you have created using it that you could share? Very interested in seeing an end product and what is possible.
- 11moRandall AlanPro MemberInvestor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
All the properties are in the same county that we live in. Maintenance issues are typically a phone call to either an AC tech or Plumber. We give the vendor our tenants name & phone number and then have them call and set up the appointment so we don’t have to be the relay between the two. I’ve literally called the plumber from Egypt before! Very seldom am I needed at a property.
When we first started out, we tried to do as much of the maintenance as we could ourselves. we are 8 years into our ‘journey’ and as time has gone by and there was enough money in the maintenance budget, we just prefer to farm the maintenance out. We found a good handyman for medium level maintenance items like painting a house, etc. Sometimes we will take those tasks on… It’s more a question how much free time we have versus how expensive the quote is for any given task. We budget $100-125/ door/ month into a dedicated maintenance account, which will cover basic things like hot water heaters, ac maintenance, septic clean outs, etc. it doesn’t cover roofs, or many major things like AC replacements… though we will occasionally get enough in that account to offset major items.
Randy- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Randall Alan:
All the properties are in the same county that we live in. Maintenance issues are typically a phone call to either an AC tech or Plumber. We give the vendor our tenants name & phone number and then have them call and set up the appointment so we don’t have to be the relay between the two. I’ve literally called the plumber from Egypt before! Very seldom am I needed at a property.
When we first started out, we tried to do as much of the maintenance as we could ourselves. we are 8 years into our ‘journey’ and as time has gone by and there was enough money in the maintenance budget, we just prefer to farm the maintenance out. We found a good handyman for medium level maintenance items like painting a house, etc. Sometimes we will take those tasks on… It’s more a question how much free time we have versus how expensive the quote is for any given task. We budget $100-125/ door/ month into a dedicated maintenance account, which will cover basic things like hot water heaters, ac maintenance, septic clean outs, etc. it doesn’t cover roofs, or many major things like AC replacements… though we will occasionally get enough in that account to offset major items.
RandyWhere do the funds for more major items come from? Me personally I put a sixth of rent aside for vacancy and maintenance but even then it isn't enough to cover the infrequent but expensive capital maintenance or expensive turnovers. Makes my portfolio bearably but definitely cash flow negative over the long haul, which means I'm not personally looking to add more single family homes to my portfolio. Sure, there's debt pay down and appreciation, but these don't really make much difference to my day to day life. Do you consider your portfolio cash flow positive when you include major capital expenses?
- 11moRandall AlanPro MemberInvestor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
When we first bought our properties our rule of thumb was that any rental we bought had to cash flow at least $300 after principal, interest, taxes, insurance, and a $100 maintenance reserve. After 5-8 years of rent increases, plus selling some properties where we had good capital gains after the Covid era and paying off other properties with those gains, our cash flow really increased substantially. Our average cash flow today is over $700/door. So we are able to not only live comfortably on that cash flow, but also fund any necessary capital improvements. We probably have about $1.5mm invested in our properties, but their market value is probably close to $6mm today (before mortgages). I can’t take credit for it other than buying smart… the market really just exploded between 2020 and 2023 and the value of our portfolio just skyrocketed. Our typical $ / square foot purchase price was about $78. Today they have increased to about $180-$200/sf.
The daily pace is easy enough that we also take on flips one at a time… so we have done about 8 of those now where we have also put money towards paying off loans on our portfolio. We will typically net $50-$100k on our typical flip before capital gains. Between the bread and butter rentals and the flips it keeps us fairly busy most days… typically always something that needs to be attended to… so it isn’t all ‘sunshine and butterflies’… but we get up when we want to, and most days are pretty relaxed. Then there are the rare days when you get a call that your tenant caught your unit on fire (has happened twice to us in 8 years). So again, it does have its moments!
But on a typical day we set our own schedule… so it is possible to get there over time. Buying right is probably the most important part. You have to start off with cash flow…. You can’t be cash flow negative starting off and hope it works out.
Randy- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Randall Alan:
When we first bought our properties our rule of thumb was that any rental we bought had to cash flow at least $300 after principal, interest, taxes, insurance, and a $100 maintenance reserve. After 5-8 years of rent increases, plus selling some properties where we had good capital gains after the Covid era and paying off other properties with those gains, our cash flow really increased substantially. Our average cash flow today is over $700/door. So we are able to not only live comfortably on that cash flow, but also fund any necessary capital improvements. We probably have about $1.5mm invested in our properties, but their market value is probably close to $6mm today (before mortgages). I can’t take credit for it other than buying smart… the market really just exploded between 2020 and 2023 and the value of our portfolio just skyrocketed. Our typical $ / square foot purchase price was about $78. Today they have increased to about $180-$200/sf.
The daily pace is easy enough that we also take on flips one at a time… so we have done about 8 of those now where we have also put money towards paying off loans on our portfolio. We will typically net $50-$100k on our typical flip before capital gains. Between the bread and butter rentals and the flips it keeps us fairly busy most days… typically always something that needs to be attended to… so it isn’t all ‘sunshine and butterflies’… but we get up when we want to, and most days are pretty relaxed. Then there are the rare days when you get a call that your tenant caught your unit on fire (has happened twice to us in 8 years). So again, it does have its moments!
But on a typical day we set our own schedule… so it is possible to get there over time. Buying right is probably the most important part. You have to start off with cash flow…. You can’t be cash flow negative starting off and hope it works out.
RandySounds like you have a very stable operation, congrats. Just wanted to dig into one comment you made where you are using money made during flips to pay down loans. What makes you choose to do that rather than allow the loan to be paid off slowly and enjoy the low-interest debt while you use your cash to invest in more profitable activities?
- 11moRandall AlanPro MemberInvestor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
Quote from @Austin Fowler:
Quote from @Randall Alan:
When we first bought our properties our rule of thumb was that any rental we bought had to cash flow at least $300 after principal, interest, taxes, insurance, and a $100 maintenance reserve. After 5-8 years of rent increases, plus selling some properties where we had good capital gains after the Covid era and paying off other properties with those gains, our cash flow really increased substantially. Our average cash flow today is over $700/door. So we are able to not only live comfortably on that cash flow, but also fund any necessary capital improvements. We probably have about $1.5mm invested in our properties, but their market value is probably close to $6mm today (before mortgages). I can’t take credit for it other than buying smart… the market really just exploded between 2020 and 2023 and the value of our portfolio just skyrocketed. Our typical $ / square foot purchase price was about $78. Today they have increased to about $180-$200/sf.
The daily pace is easy enough that we also take on flips one at a time… so we have done about 8 of those now where we have also put money towards paying off loans on our portfolio. We will typically net $50-$100k on our typical flip before capital gains. Between the bread and butter rentals and the flips it keeps us fairly busy most days… typically always something that needs to be attended to… so it isn’t all ‘sunshine and butterflies’… but we get up when we want to, and most days are pretty relaxed. Then there are the rare days when you get a call that your tenant caught your unit on fire (has happened twice to us in 8 years). So again, it does have its moments!
But on a typical day we set our own schedule… so it is possible to get there over time. Buying right is probably the most important part. You have to start off with cash flow…. You can’t be cash flow negative starting off and hope it works out.
RandySounds like you have a very stable operation, congrats. Just wanted to dig into one comment you made where you are using money made during flips to pay down loans. What makes you choose to do that rather than allow the loan to be paid off slowly and enjoy the low-interest debt while you use your cash to invest in more profitable activities?
I think it's a matter 'What is your priority... cash flow, or free cash?'
For us, we really didn't need the free cash to put towards another property. We had enough in reserves to be able to buy any typical investment that came along. So at that point - we tend to prioritize the cash flow - because we get to use that every month... sort of like a refilling ATM.
The other factor you may be missing in our logic is that we bought our properties in 2018-2020... so the interest rates on our properties were in the mid 5's to low 6's. By today's standards descent... but in 2021-2022 that was really high compared to the 2's and 3's people were getting... so paying off those 'high' interest rate loans made more sense to us.
And while we have all been taught the value of the cash grab of flips... at the end of the day, leaving the property financed simply increases your interest expense to the bank. Yes, the interest also gives you a tax write off... but at the expense of less cash-flow. So we sort of take a balanced approach of sometimes taking the cash, and sometimes paying down the loans for the cash flow. The logic being that we targeted our highest interest loans to maximize the additional cash flow we would receive when we paid off a certain property.
Randy
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Randall Alan:
Quote from @Austin Fowler:
Quote from @Randall Alan:
When we first bought our properties our rule of thumb was that any rental we bought had to cash flow at least $300 after principal, interest, taxes, insurance, and a $100 maintenance reserve. After 5-8 years of rent increases, plus selling some properties where we had good capital gains after the Covid era and paying off other properties with those gains, our cash flow really increased substantially. Our average cash flow today is over $700/door. So we are able to not only live comfortably on that cash flow, but also fund any necessary capital improvements. We probably have about $1.5mm invested in our properties, but their market value is probably close to $6mm today (before mortgages). I can’t take credit for it other than buying smart… the market really just exploded between 2020 and 2023 and the value of our portfolio just skyrocketed. Our typical $ / square foot purchase price was about $78. Today they have increased to about $180-$200/sf.
The daily pace is easy enough that we also take on flips one at a time… so we have done about 8 of those now where we have also put money towards paying off loans on our portfolio. We will typically net $50-$100k on our typical flip before capital gains. Between the bread and butter rentals and the flips it keeps us fairly busy most days… typically always something that needs to be attended to… so it isn’t all ‘sunshine and butterflies’… but we get up when we want to, and most days are pretty relaxed. Then there are the rare days when you get a call that your tenant caught your unit on fire (has happened twice to us in 8 years). So again, it does have its moments!
But on a typical day we set our own schedule… so it is possible to get there over time. Buying right is probably the most important part. You have to start off with cash flow…. You can’t be cash flow negative starting off and hope it works out.
RandySounds like you have a very stable operation, congrats. Just wanted to dig into one comment you made where you are using money made during flips to pay down loans. What makes you choose to do that rather than allow the loan to be paid off slowly and enjoy the low-interest debt while you use your cash to invest in more profitable activities?
I think it's a matter 'What is your priority... cash flow, or free cash?'
For us, we really didn't need the free cash to put towards another property. We had enough in reserves to be able to buy any typical investment that came along. So at that point - we tend to prioritize the cash flow - because we get to use that every month... sort of like a refilling ATM.
The other factor you may be missing in our logic is that we bought our properties in 2018-2020... so the interest rates on our properties were in the mid 5's to low 6's. By today's standards descent... but in 2021-2022 that was really high compared to the 2's and 3's people were getting... so paying off those 'high' interest rate loans made more sense to us.
And while we have all been taught the value of the cash grab of flips... at the end of the day, leaving the property financed simply increases your interest expense to the bank. Yes, the interest also gives you a tax write off... but at the expense of less cash-flow. So we sort of take a balanced approach of sometimes taking the cash, and sometimes paying down the loans for the cash flow. The logic being that we targeted our highest interest loans to maximize the additional cash flow we would receive when we paid off a certain property.
Randy
Thanks for the extra detail. Does that mean you do not often see deals that you very badly wish to acquire that would make you strong double-digit+ returns? In my own case, I am definitely capital limited when it comes to expanding my portfolio, I have a very full high quality deal pipeline.
- 11moRandall AlanPro MemberInvestor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
Quote from @Austin Fowler:
Quote from @Randall Alan:
Quote from @Austin Fowler:
Quote from @Randall Alan:
When we first bought our properties our rule of thumb was that any rental we bought had to cash flow at least $300 after principal, interest, taxes, insurance, and a $100 maintenance reserve. After 5-8 years of rent increases, plus selling some properties where we had good capital gains after the Covid era and paying off other properties with those gains, our cash flow really increased substantially. Our average cash flow today is over $700/door. So we are able to not only live comfortably on that cash flow, but also fund any necessary capital improvements. We probably have about $1.5mm invested in our properties, but their market value is probably close to $6mm today (before mortgages). I can’t take credit for it other than buying smart… the market really just exploded between 2020 and 2023 and the value of our portfolio just skyrocketed. Our typical $ / square foot purchase price was about $78. Today they have increased to about $180-$200/sf.
The daily pace is easy enough that we also take on flips one at a time… so we have done about 8 of those now where we have also put money towards paying off loans on our portfolio. We will typically net $50-$100k on our typical flip before capital gains. Between the bread and butter rentals and the flips it keeps us fairly busy most days… typically always something that needs to be attended to… so it isn’t all ‘sunshine and butterflies’… but we get up when we want to, and most days are pretty relaxed. Then there are the rare days when you get a call that your tenant caught your unit on fire (has happened twice to us in 8 years). So again, it does have its moments!
But on a typical day we set our own schedule… so it is possible to get there over time. Buying right is probably the most important part. You have to start off with cash flow…. You can’t be cash flow negative starting off and hope it works out.
RandySounds like you have a very stable operation, congrats. Just wanted to dig into one comment you made where you are using money made during flips to pay down loans. What makes you choose to do that rather than allow the loan to be paid off slowly and enjoy the low-interest debt while you use your cash to invest in more profitable activities?
I think it's a matter 'What is your priority... cash flow, or free cash?'
For us, we really didn't need the free cash to put towards another property. We had enough in reserves to be able to buy any typical investment that came along. So at that point - we tend to prioritize the cash flow - because we get to use that every month... sort of like a refilling ATM.
The other factor you may be missing in our logic is that we bought our properties in 2018-2020... so the interest rates on our properties were in the mid 5's to low 6's. By today's standards descent... but in 2021-2022 that was really high compared to the 2's and 3's people were getting... so paying off those 'high' interest rate loans made more sense to us.
And while we have all been taught the value of the cash grab of flips... at the end of the day, leaving the property financed simply increases your interest expense to the bank. Yes, the interest also gives you a tax write off... but at the expense of less cash-flow. So we sort of take a balanced approach of sometimes taking the cash, and sometimes paying down the loans for the cash flow. The logic being that we targeted our highest interest loans to maximize the additional cash flow we would receive when we paid off a certain property.
Randy
Thanks for the extra detail. Does that mean you do not often see deals that you very badly wish to acquire that would make you strong double-digit+ returns? In my own case, I am definitely capital limited when it comes to expanding my portfolio, I have a very full high quality deal pipeline.
No, it means that with the rentals and the flips we are at a comfortable pace, and we aren’t always looking to grow.
One could ask, “why don’t you get a property manager and keep expanding”. But the truth of the matter is that there then would be the management of the property manager. In short, we are comfortable scaled to the size we are at. Real estate probably occupies an hour of our day on average. We have automated pretty much everything we can to just have to focus on what’s important at the moment. We have complete control over the domain we have built. No “syndication” like deals where you are an LP, or a GP for that matter… having to answer to other people or wonder what’s going on! We quit two 6 figure corporate jobs 5 years ago when we got to about 20 units and we are loving the pace, and just looking to enjoy life more. We just got back from a 10 day Italy trip… then went for a week to visit grandkids… bought a house on the trip with little thought on how we would pay for it (because the resources are there).
At around 55 years old, with the assets we have acquired, we are just satisfied managing what we currently have - and it is all pretty much thanks to real estate! It doesn’t mean we wouldn’t take a great deal that came along, but there is a pace to our life that we are content with, and being able to self-manage it ourselves.
I was talking about a design-build 8-unit deal with a buddy tonight… probably a $2mm deal he brought up. We may do it with him if the numbers make sense. Need be we can walk into our bank and leverage our portfolio to pull off that type of deal. But because we are content, we aren't shaking the trees and scouring the corners of the web for maximum deal flow. We are shifting our priorities to enjoy life more. It's a little bit like the late night real estate infomercial where the guy is sitting on the beach saying, "Don't you want to be me?" The answer is, "we are basically there"… not like Grant Cardone "private jet" level,.. but certainly enough to retire and do whatever we want. We attend local REIA meetings and offer advice to beginners on how we did what we did, and the easiest path forward for their particular situation… sort of giving back to the RE community.So by no means are we out of the game. But I would say that we are in a cruise / coast phase of our journey. Even if we sold off 2 properties a year to downsize it would take us 18 years to liquidate our portfolio. (The goal is to continue to use the cash flow to not tap into retirement resources.) That would put us at 73 years old! We aren’t exactly how we will approach that… but until then we will keep the ship afloat and enjoy the ride!
All the best!
Randy
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Randall Alan:
Quote from @Austin Fowler:
Quote from @Randall Alan:
Quote from @Austin Fowler:
Quote from @Randall Alan:
When we first bought our properties our rule of thumb was that any rental we bought had to cash flow at least $300 after principal, interest, taxes, insurance, and a $100 maintenance reserve. After 5-8 years of rent increases, plus selling some properties where we had good capital gains after the Covid era and paying off other properties with those gains, our cash flow really increased substantially. Our average cash flow today is over $700/door. So we are able to not only live comfortably on that cash flow, but also fund any necessary capital improvements. We probably have about $1.5mm invested in our properties, but their market value is probably close to $6mm today (before mortgages). I can’t take credit for it other than buying smart… the market really just exploded between 2020 and 2023 and the value of our portfolio just skyrocketed. Our typical $ / square foot purchase price was about $78. Today they have increased to about $180-$200/sf.
The daily pace is easy enough that we also take on flips one at a time… so we have done about 8 of those now where we have also put money towards paying off loans on our portfolio. We will typically net $50-$100k on our typical flip before capital gains. Between the bread and butter rentals and the flips it keeps us fairly busy most days… typically always something that needs to be attended to… so it isn’t all ‘sunshine and butterflies’… but we get up when we want to, and most days are pretty relaxed. Then there are the rare days when you get a call that your tenant caught your unit on fire (has happened twice to us in 8 years). So again, it does have its moments!
But on a typical day we set our own schedule… so it is possible to get there over time. Buying right is probably the most important part. You have to start off with cash flow…. You can’t be cash flow negative starting off and hope it works out.
RandySounds like you have a very stable operation, congrats. Just wanted to dig into one comment you made where you are using money made during flips to pay down loans. What makes you choose to do that rather than allow the loan to be paid off slowly and enjoy the low-interest debt while you use your cash to invest in more profitable activities?
I think it's a matter 'What is your priority... cash flow, or free cash?'
For us, we really didn't need the free cash to put towards another property. We had enough in reserves to be able to buy any typical investment that came along. So at that point - we tend to prioritize the cash flow - because we get to use that every month... sort of like a refilling ATM.
The other factor you may be missing in our logic is that we bought our properties in 2018-2020... so the interest rates on our properties were in the mid 5's to low 6's. By today's standards descent... but in 2021-2022 that was really high compared to the 2's and 3's people were getting... so paying off those 'high' interest rate loans made more sense to us.
And while we have all been taught the value of the cash grab of flips... at the end of the day, leaving the property financed simply increases your interest expense to the bank. Yes, the interest also gives you a tax write off... but at the expense of less cash-flow. So we sort of take a balanced approach of sometimes taking the cash, and sometimes paying down the loans for the cash flow. The logic being that we targeted our highest interest loans to maximize the additional cash flow we would receive when we paid off a certain property.
Randy
Thanks for the extra detail. Does that mean you do not often see deals that you very badly wish to acquire that would make you strong double-digit+ returns? In my own case, I am definitely capital limited when it comes to expanding my portfolio, I have a very full high quality deal pipeline.
No, it means that with the rentals and the flips we are at a comfortable pace, and we aren’t always looking to grow.
One could ask, “why don’t you get a property manager and keep expanding”. But the truth of the matter is that there then would be the management of the property manager. In short, we are comfortable scaled to the size we are at. Real estate probably occupies an hour of our day on average. We have automated pretty much everything we can to just have to focus on what’s important at the moment. We have complete control over the domain we have built. No “syndication” like deals where you are an LP, or a GP for that matter… having to answer to other people or wonder what’s going on! We quit two 6 figure corporate jobs 5 years ago when we got to about 20 units and we are loving the pace, and just looking to enjoy life more. We just got back from a 10 day Italy trip… then went for a week to visit grandkids… bought a house on the trip with little thought on how we would pay for it (because the resources are there).
At around 55 years old, with the assets we have acquired, we are just satisfied managing what we currently have - and it is all pretty much thanks to real estate! It doesn’t mean we wouldn’t take a great deal that came along, but there is a pace to our life that we are content with, and being able to self-manage it ourselves.
I was talking about a design-build 8-unit deal with a buddy tonight… probably a $2mm deal he brought up. We may do it with him if the numbers make sense. Need be we can walk into our bank and leverage our portfolio to pull off that type of deal. But because we are content, we aren't shaking the trees and scouring the corners of the web for maximum deal flow. We are shifting our priorities to enjoy life more. It's a little bit like the late night real estate infomercial where the guy is sitting on the beach saying, "Don't you want to be me?" The answer is, "we are basically there"… not like Grant Cardone "private jet" level,.. but certainly enough to retire and do whatever we want. We attend local REIA meetings and offer advice to beginners on how we did what we did, and the easiest path forward for their particular situation… sort of giving back to the RE community.So by no means are we out of the game. But I would say that we are in a cruise / coast phase of our journey. Even if we sold off 2 properties a year to downsize it would take us 18 years to liquidate our portfolio. (The goal is to continue to use the cash flow to not tap into retirement resources.) That would put us at 73 years old! We aren’t exactly how we will approach that… but until then we will keep the ship afloat and enjoy the ride!
All the best!
Randy
That's great Randy, congratulations on the portfolio you have built in the life you have built for yourselves. In my own case I am also financially free, but always looking for ideas on how to grow. I'm a passionate philanthropist, have given away $350,000 so far this year, so the bigger I build, the more impact I can have. That's the "why" that gets me out of bed each morning and keeps me up at night writing messages like this one :-) I've been very fortunate, have a career I love in quantum computing, and a $35M growing portfolio, and three young kids, and my goal is to create as many opportunities for others to thrive as possible. Would be happy to speak to anyone you know that is looking for aggressive growth.
- 11moJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
@Austin Fowler
I self manage 30 properties and it’s easy. I use apartments.com for all of it and it’s free. I’m mostly in the Dallas area where I live, but bought my last 12 in Arkansas and Missouri. I bought two in Missouri for 63k last month that rent out for $1950 total between both of them. I took them sight unseen “as is” which has worked out well for me so far.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @John Morgan:
@Austin Fowler
I self manage 30 properties and it’s easy. I use apartments.com for all of it and it’s free. I’m mostly in the Dallas area where I live, but bought my last 12 in Arkansas and Missouri. I bought two in Missouri for 63k last month that rent out for $1950 total between both of them. I took them sight unseen “as is” which has worked out well for me so far.
That's very strong rent given the purchase price. How often do you find deals like that? How aggressively are you expanding your portfolio? What limits the rate of growth of your portfolio? Quality deals, or available capital?
- 11moJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votesI usually find a couple great deals each year. I’ve throttled back and not looking to grow now that I have 31 SFR. But when wholesalers bring me really good deals, it’s hard to pass up! Capital isn’t a problem anymore. My profits are around 20k/month so I can stack up cash fairly quickly. And can always do more 401k loans up to 50k if necessary.
Quote from @Austin Fowler:
Quote from @John Morgan:
@Austin Fowler
I self manage 30 properties and it’s easy. I use apartments.com for all of it and it’s free. I’m mostly in the Dallas area where I live, but bought my last 12 in Arkansas and Missouri. I bought two in Missouri for 63k last month that rent out for $1950 total between both of them. I took them sight unseen “as is” which has worked out well for me so far.
That's very strong rent given the purchase price. How often do you find deals like that? How aggressively are you expanding your portfolio? What limits the rate of growth of your portfolio? Quality deals, or available capital?
- 11moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votesMy view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to all- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
- 11moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Congrats on the fish! This comment stumped me:
"I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get."Can you elaborate?
- 11moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Congrats on the fish! This comment stumped me:
"I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get."Can you elaborate?
San Diego bonus density law was over turned a couple months ago. It had allowed one additional ADU for each income restricted ADU.
The below was the highest value use of this particular property. Note my protege was not the developer, he sold the lot to the developer for ~$500k over current use valuation.
https://www.cbs8.com/article/news/local/working-for-you/new-...
As indicated the law was changed a few months ago in large part due to this developer.. Developer took some grief as neighbors were not happy. My protege who sold land to developer got no complaints even though he knew developer was going to place a lot of units on the lot (but likely was not expecting this many units).
most jurisdictions have laws that can be leveraged for value add. Rehabs are obvious value adds, not sophisticated as they do not leverage a knowledge that not everyone may have.In ca they just raised the height limit near transit centers. Current use and comps on these properties can be significantly less than the value associated with a repurpose. Note you may not need to be the developer if you find a real good opportunity property. Buy it based on current value and comps, sell it based on highest value opportunity. CA is full of these type of laws.
I am a partner on a project where the bulk of the value add is leveraging a law that allows ADUs to be added out of legal existing space (believe local jurisdiction law). 9 new small units from garage space. We also are rehabbing the units to drive rents up on the existing units. It seems like a good investment and it has worked numerous times previously, but this one is having some issues and will not create the return I was hoping. Does not mean that it is not a good sophisticated value add, but there have been other issues.
Unfortunately many of these sophisticated value adds are jurisdictional specific or at least not national wide.
by the way we use RentRedi It was free with BP Pro (may still be). There were some hurdles getting it set up for our units (wife did it), but we got pretty good support. We never used anything else to have a good comparison, but so far we have been more than satisfied with RentRedi with only one issue/hiccup.
Good luck
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Congrats on the fish! This comment stumped me:
"I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get."Can you elaborate?
San Diego bonus density law was over turned a couple months ago. It had allowed one additional ADU for each income restricted ADU.
The below was the highest value use of this particular property. Note my protege was not the developer, he sold the lot to the developer for ~$500k over current use valuation.
https://www.cbs8.com/article/news/local/working-for-you/new-...
As indicated the law was changed a few months ago in large part due to this developer.. Developer took some grief as neighbors were not happy. My protege who sold land to developer got no complaints even though he knew developer was going to place a lot of units on the lot (but likely was not expecting this many units).
most jurisdictions have laws that can be leveraged for value add. Rehabs are obvious value adds, not sophisticated as they do not leverage a knowledge that not everyone may have.In ca they just raised the height limit near transit centers. Current use and comps on these properties can be significantly less than the value associated with a repurpose. Note you may not need to be the developer if you find a real good opportunity property. Buy it based on current value and comps, sell it based on highest value opportunity. CA is full of these type of laws.
I am a partner on a project where the bulk of the value add is leveraging a law that allows ADUs to be added out of legal existing space (believe local jurisdiction law). 9 new small units from garage space. We also are rehabbing the units to drive rents up on the existing units. It seems like a good investment and it has worked numerous times previously, but this one is having some issues and will not create the return I was hoping. Does not mean that it is not a good sophisticated value add, but there have been other issues.
Unfortunately many of these sophisticated value adds are jurisdictional specific or at least not national wide.
Good luck
Sorry, "9 new small units from garage space"? That's way outside my knowledge. Can you elaborate? I had no idea something like that was possible. Would also love to understand more about your current deal that your partnering on that is having issues. Is this your primary focus at the moment? Or do you do multiple deals like this simultaneously?
- 11moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Congrats on the fish! This comment stumped me:
"I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get."Can you elaborate?
San Diego bonus density law was over turned a couple months ago. It had allowed one additional ADU for each income restricted ADU.
The below was the highest value use of this particular property. Note my protege was not the developer, he sold the lot to the developer for ~$500k over current use valuation.
https://www.cbs8.com/article/news/local/working-for-you/new-...
As indicated the law was changed a few months ago in large part due to this developer.. Developer took some grief as neighbors were not happy. My protege who sold land to developer got no complaints even though he knew developer was going to place a lot of units on the lot (but likely was not expecting this many units).
most jurisdictions have laws that can be leveraged for value add. Rehabs are obvious value adds, not sophisticated as they do not leverage a knowledge that not everyone may have.In ca they just raised the height limit near transit centers. Current use and comps on these properties can be significantly less than the value associated with a repurpose. Note you may not need to be the developer if you find a real good opportunity property. Buy it based on current value and comps, sell it based on highest value opportunity. CA is full of these type of laws.
I am a partner on a project where the bulk of the value add is leveraging a law that allows ADUs to be added out of legal existing space (believe local jurisdiction law). 9 new small units from garage space. We also are rehabbing the units to drive rents up on the existing units. It seems like a good investment and it has worked numerous times previously, but this one is having some issues and will not create the return I was hoping. Does not mean that it is not a good sophisticated value add, but there have been other issues.
Unfortunately many of these sophisticated value adds are jurisdictional specific or at least not national wide.
Good luck
Sorry, "9 new small units from garage space"? That's way outside my knowledge. Can you elaborate? I had no idea something like that was possible. Would also love to understand more about your current deal that your partnering on that is having issues. Is this your primary focus at the moment? Or do you do multiple deals like this simultaneously?
A local law allows you to add as many ADUs as you desire out of legal permitted space. Bought a small MF that had a lot of legal garage space. Best NOI is achieved by maximizing the unit count so all units will be small (studio or 1 BR). This particular effort has had some issues including a partner divorce. It is not doing good. This same sophisticated value add in the past has done great.
Note this is a jurisdiction specific value add (as are many sophisticated value adds).
I am actively looking for (some of these are for my son)
- a beginner fkip in San Diego area: we recently placed an offer on a flood damaged condo that was down to studs rehab. Our initial offer was $90k over initial asking price. We were told that there were 5 higher offers. I think selling agent was lying to get a significantly higher offer from us but my son dropped the ball and did not stay on top of it. It sold for $2.5k more than our initial offer. Needless to say we could have beat that offer.
- a mf value add in San Diego for son to house hack. Bonus if it has below market financing. Note because he will OO, he can assume FHA, VA, etc.
- select market STRs. I am not identifying some of these markets but will say I have placed offers on emerald coast condos (specifying that market because it is not below the radar). This is not the market of my last couple of offers on STR and emerald coast is a competitive market so ROI is not great but private beaches are not allowed in most coastal states but is in Florida. What is a private beach going to be worth 20 years from now?
we keep busy: vacations including conferences, mentoring handyman crew, playing with the various toys, hiking/backpacking, snorkel/scuba. - Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Congrats on the fish! This comment stumped me:
"I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get."Can you elaborate?
San Diego bonus density law was over turned a couple months ago. It had allowed one additional ADU for each income restricted ADU.
The below was the highest value use of this particular property. Note my protege was not the developer, he sold the lot to the developer for ~$500k over current use valuation.
https://www.cbs8.com/article/news/local/working-for-you/new-...
As indicated the law was changed a few months ago in large part due to this developer.. Developer took some grief as neighbors were not happy. My protege who sold land to developer got no complaints even though he knew developer was going to place a lot of units on the lot (but likely was not expecting this many units).
most jurisdictions have laws that can be leveraged for value add. Rehabs are obvious value adds, not sophisticated as they do not leverage a knowledge that not everyone may have.In ca they just raised the height limit near transit centers. Current use and comps on these properties can be significantly less than the value associated with a repurpose. Note you may not need to be the developer if you find a real good opportunity property. Buy it based on current value and comps, sell it based on highest value opportunity. CA is full of these type of laws.
I am a partner on a project where the bulk of the value add is leveraging a law that allows ADUs to be added out of legal existing space (believe local jurisdiction law). 9 new small units from garage space. We also are rehabbing the units to drive rents up on the existing units. It seems like a good investment and it has worked numerous times previously, but this one is having some issues and will not create the return I was hoping. Does not mean that it is not a good sophisticated value add, but there have been other issues.
Unfortunately many of these sophisticated value adds are jurisdictional specific or at least not national wide.
Good luck
Sorry, "9 new small units from garage space"? That's way outside my knowledge. Can you elaborate? I had no idea something like that was possible. Would also love to understand more about your current deal that your partnering on that is having issues. Is this your primary focus at the moment? Or do you do multiple deals like this simultaneously?
A local law allows you to add as many ADUs as you desire out of legal permitted space. Bought a small MF that had a lot of legal garage space. Best NOI is achieved by maximizing the unit count so all units will be small (studio or 1 BR).
Note this is a jurisdiction specific value add (as are many sophisticated value adds).
No I am actively looking for (some of these are for my son)
- a beginner fkip in San Diego area: we recently placed an offer on a flood damaged condo that was down to studs rehab. Our initial offer was $90k over initial asking price. We were told that there were 5 higher offers. I think selling agent was lying to get a significantly higher offer from us but my son dropped the ball and did not stay on top of it. It sold for $2.5k more than our initial offer. Needless to say we could have beat that offer.
- a mf value add in San Diego for son to house hack. Bonus if it has below market financing. Note because he will OO, he can assume FHA, VA, etc.
- select market STRs. I am not identifying some of these markets but will say I have placed offers at emerald coast condos (specifying that market because it is not below the radar). This is not the market of my last couple of offers.
Thanks for the extra detail, would it be fair to say you are deal flow limited not capital limited when it comes to expansion? Do you ever need/want to find capital partners?
- 11moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Congrats on the fish! This comment stumped me:
"I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get."Can you elaborate?
San Diego bonus density law was over turned a couple months ago. It had allowed one additional ADU for each income restricted ADU.
The below was the highest value use of this particular property. Note my protege was not the developer, he sold the lot to the developer for ~$500k over current use valuation.
https://www.cbs8.com/article/news/local/working-for-you/new-...
As indicated the law was changed a few months ago in large part due to this developer.. Developer took some grief as neighbors were not happy. My protege who sold land to developer got no complaints even though he knew developer was going to place a lot of units on the lot (but likely was not expecting this many units).
most jurisdictions have laws that can be leveraged for value add. Rehabs are obvious value adds, not sophisticated as they do not leverage a knowledge that not everyone may have.In ca they just raised the height limit near transit centers. Current use and comps on these properties can be significantly less than the value associated with a repurpose. Note you may not need to be the developer if you find a real good opportunity property. Buy it based on current value and comps, sell it based on highest value opportunity. CA is full of these type of laws.
I am a partner on a project where the bulk of the value add is leveraging a law that allows ADUs to be added out of legal existing space (believe local jurisdiction law). 9 new small units from garage space. We also are rehabbing the units to drive rents up on the existing units. It seems like a good investment and it has worked numerous times previously, but this one is having some issues and will not create the return I was hoping. Does not mean that it is not a good sophisticated value add, but there have been other issues.
Unfortunately many of these sophisticated value adds are jurisdictional specific or at least not national wide.
Good luck
Sorry, "9 new small units from garage space"? That's way outside my knowledge. Can you elaborate? I had no idea something like that was possible. Would also love to understand more about your current deal that your partnering on that is having issues. Is this your primary focus at the moment? Or do you do multiple deals like this simultaneously?
A local law allows you to add as many ADUs as you desire out of legal permitted space. Bought a small MF that had a lot of legal garage space. Best NOI is achieved by maximizing the unit count so all units will be small (studio or 1 BR).
Note this is a jurisdiction specific value add (as are many sophisticated value adds).
No I am actively looking for (some of these are for my son)
- a beginner fkip in San Diego area: we recently placed an offer on a flood damaged condo that was down to studs rehab. Our initial offer was $90k over initial asking price. We were told that there were 5 higher offers. I think selling agent was lying to get a significantly higher offer from us but my son dropped the ball and did not stay on top of it. It sold for $2.5k more than our initial offer. Needless to say we could have beat that offer.
- a mf value add in San Diego for son to house hack. Bonus if it has below market financing. Note because he will OO, he can assume FHA, VA, etc.
- select market STRs. I am not identifying some of these markets but will say I have placed offers at emerald coast condos (specifying that market because it is not below the radar). This is not the market of my last couple of offers.
Thanks for the extra detail, would it be fair to say you are deal flow limited not capital limited when it comes to expansion? Do you ever need/want to find capital partners?
I guess I am deal flow limited because I am not finding properties I purchase. But I get a lot of emails from wholesalers, realtors (including off market listings) p, a couple bird dogs, etc. the reality is most off market offers are not great. The interest rate increase couple with property values increasing significantly more than rents have made the current RE market challenging.
the underwriting on every offer I have made in the last couple of years would not have produced an offer from me prior to 2022. RE market is not what it was a few years ago. In my market RE prices are up substantially more than rents. I saw 2 fairly recent studies comparing renting to owner homes in the various large cities. The two studies both indicated in virtually every large city it is initially cheaper to rent than own a home on average. Both studies indicated this was the all time worst time for home ownership compared to renting. I do realize they are not projecting 10 years down the road when possibly there has been rent growth but p&i is still fixed. Or potentially 30 years down the road when the mortgage could be paid off.In emerald coast my underwriting shows cash negative, but my head tells me private beaches are rare. Rare desirable items seem to consistently appreciate faster than inflation and less rare items. If I purchase a condo with a private beach in emerald cost will it appreciate like other rare desirable items?
I do not know how many states allow private beaches, but this is not an Alaska private beach, but an emerald coast private beach. Who would not want to own a private beach at emerald coast? Finite supply.
Good luck
- 11moMelissa HaworthBusiness MemberReal Estate Agent · The Panhandle | The Emerald Coast | Panama City Beach | Destin · Member since 2017 · 257 posts · 101 votes
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Congrats on the fish! This comment stumped me:
"I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get."Can you elaborate?
San Diego bonus density law was over turned a couple months ago. It had allowed one additional ADU for each income restricted ADU.
The below was the highest value use of this particular property. Note my protege was not the developer, he sold the lot to the developer for ~$500k over current use valuation.
https://www.cbs8.com/article/news/local/working-for-you/new-...
As indicated the law was changed a few months ago in large part due to this developer.. Developer took some grief as neighbors were not happy. My protege who sold land to developer got no complaints even though he knew developer was going to place a lot of units on the lot (but likely was not expecting this many units).
most jurisdictions have laws that can be leveraged for value add. Rehabs are obvious value adds, not sophisticated as they do not leverage a knowledge that not everyone may have.In ca they just raised the height limit near transit centers. Current use and comps on these properties can be significantly less than the value associated with a repurpose. Note you may not need to be the developer if you find a real good opportunity property. Buy it based on current value and comps, sell it based on highest value opportunity. CA is full of these type of laws.
I am a partner on a project where the bulk of the value add is leveraging a law that allows ADUs to be added out of legal existing space (believe local jurisdiction law). 9 new small units from garage space. We also are rehabbing the units to drive rents up on the existing units. It seems like a good investment and it has worked numerous times previously, but this one is having some issues and will not create the return I was hoping. Does not mean that it is not a good sophisticated value add, but there have been other issues.
Unfortunately many of these sophisticated value adds are jurisdictional specific or at least not national wide.
Good luck
Sorry, "9 new small units from garage space"? That's way outside my knowledge. Can you elaborate? I had no idea something like that was possible. Would also love to understand more about your current deal that your partnering on that is having issues. Is this your primary focus at the moment? Or do you do multiple deals like this simultaneously?
A local law allows you to add as many ADUs as you desire out of legal permitted space. Bought a small MF that had a lot of legal garage space. Best NOI is achieved by maximizing the unit count so all units will be small (studio or 1 BR).
Note this is a jurisdiction specific value add (as are many sophisticated value adds).
No I am actively looking for (some of these are for my son)
- a beginner fkip in San Diego area: we recently placed an offer on a flood damaged condo that was down to studs rehab. Our initial offer was $90k over initial asking price. We were told that there were 5 higher offers. I think selling agent was lying to get a significantly higher offer from us but my son dropped the ball and did not stay on top of it. It sold for $2.5k more than our initial offer. Needless to say we could have beat that offer.
- a mf value add in San Diego for son to house hack. Bonus if it has below market financing. Note because he will OO, he can assume FHA, VA, etc.
- select market STRs. I am not identifying some of these markets but will say I have placed offers at emerald coast condos (specifying that market because it is not below the radar). This is not the market of my last couple of offers.
Thanks for the extra detail, would it be fair to say you are deal flow limited not capital limited when it comes to expansion? Do you ever need/want to find capital partners?
I guess I am deal flow limited because I am not finding properties I purchase. But I get a lot of emails from wholesalers, realtors (including off market listings) p, a couple bird dogs, etc. the reality is most off market offers are not great. The interest rate increase couple with property values increasing significantly more than rents have made the current RE market challenging.
the underwriting on every offer I have made in the last couple of years would not have produced an offer from me prior to 2022. RE market is not what it was a few years ago. In my market RE prices are up substantially more than rents. I saw 2 fairly recent studies comparing renting to owner homes in the various large cities. The two studies both indicated in virtually every large city it is initially cheaper to rent than own a home on average. Both studies indicated this was the all time worst time for home ownership compared to renting. I do realize they are not projecting 10 years down the road when possibly there has been rent growth but p&i is still fixed. Or potentially 30 years down the road when the mortgage could be paid off.In emerald coast my underwriting shows cash negative, but my head tells me private beaches are rare. Rare desirable items seem to consistently appreciate faster than inflation and less rare items. If I purchase a condo with a private beach in emerald cost will it appreciate like other rare desirable items?
I do not know how many states allow private beaches, but this is not an Alaska private beach, but an emerald coast private beach. Who would not want to own a private beach at emerald coast? Finite supply.
Good luck
I think a lot of us are in that same boat, Dan! Trying to reconcile what makes sense now vs what used to feel like a slam dunk.
You brought up something super interesting with private beaches. Totally agree, rare and desirable tends to win long-term. In the Emerald Coast specifically, there’s a very limited inventory of condos with true private beach access, and once you add things like strong associations, updated buildings, and walkability, the list gets even shorter. That scarcity definitely helps with appreciation over time, and also gives you a stronger edge with guest demand when the STR numbers don't pencil as easily on paper today.
Out of curiosity, are you leaning toward one specific part of the Emerald Coast? Some pockets are still under the radar compared to Destin or 30A, and I’ve seen some investors find decent value by stepping just outside the most hyped areas while still holding the beach proximity card.
Also if you’re open to it, I’d love to hear how you're underwriting appreciation vs cash flow when you're looking at something like a beachfront condo. I think a lot of us are trying to figure out how to weigh those tradeoffs in today’s market
- 11moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Melissa Haworth:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Congrats on the fish! This comment stumped me:
"I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get."Can you elaborate?
San Diego bonus density law was over turned a couple months ago. It had allowed one additional ADU for each income restricted ADU.
The below was the highest value use of this particular property. Note my protege was not the developer, he sold the lot to the developer for ~$500k over current use valuation.
https://www.cbs8.com/article/news/local/working-for-you/new-...
As indicated the law was changed a few months ago in large part due to this developer.. Developer took some grief as neighbors were not happy. My protege who sold land to developer got no complaints even though he knew developer was going to place a lot of units on the lot (but likely was not expecting this many units).
most jurisdictions have laws that can be leveraged for value add. Rehabs are obvious value adds, not sophisticated as they do not leverage a knowledge that not everyone may have.In ca they just raised the height limit near transit centers. Current use and comps on these properties can be significantly less than the value associated with a repurpose. Note you may not need to be the developer if you find a real good opportunity property. Buy it based on current value and comps, sell it based on highest value opportunity. CA is full of these type of laws.
I am a partner on a project where the bulk of the value add is leveraging a law that allows ADUs to be added out of legal existing space (believe local jurisdiction law). 9 new small units from garage space. We also are rehabbing the units to drive rents up on the existing units. It seems like a good investment and it has worked numerous times previously, but this one is having some issues and will not create the return I was hoping. Does not mean that it is not a good sophisticated value add, but there have been other issues.
Unfortunately many of these sophisticated value adds are jurisdictional specific or at least not national wide.
Good luck
Sorry, "9 new small units from garage space"? That's way outside my knowledge. Can you elaborate? I had no idea something like that was possible. Would also love to understand more about your current deal that your partnering on that is having issues. Is this your primary focus at the moment? Or do you do multiple deals like this simultaneously?
A local law allows you to add as many ADUs as you desire out of legal permitted space. Bought a small MF that had a lot of legal garage space. Best NOI is achieved by maximizing the unit count so all units will be small (studio or 1 BR).
Note this is a jurisdiction specific value add (as are many sophisticated value adds).
No I am actively looking for (some of these are for my son)
- a beginner fkip in San Diego area: we recently placed an offer on a flood damaged condo that was down to studs rehab. Our initial offer was $90k over initial asking price. We were told that there were 5 higher offers. I think selling agent was lying to get a significantly higher offer from us but my son dropped the ball and did not stay on top of it. It sold for $2.5k more than our initial offer. Needless to say we could have beat that offer.
- a mf value add in San Diego for son to house hack. Bonus if it has below market financing. Note because he will OO, he can assume FHA, VA, etc.
- select market STRs. I am not identifying some of these markets but will say I have placed offers at emerald coast condos (specifying that market because it is not below the radar). This is not the market of my last couple of offers.
Thanks for the extra detail, would it be fair to say you are deal flow limited not capital limited when it comes to expansion? Do you ever need/want to find capital partners?
I guess I am deal flow limited because I am not finding properties I purchase. But I get a lot of emails from wholesalers, realtors (including off market listings) p, a couple bird dogs, etc. the reality is most off market offers are not great. The interest rate increase couple with property values increasing significantly more than rents have made the current RE market challenging.
the underwriting on every offer I have made in the last couple of years would not have produced an offer from me prior to 2022. RE market is not what it was a few years ago. In my market RE prices are up substantially more than rents. I saw 2 fairly recent studies comparing renting to owner homes in the various large cities. The two studies both indicated in virtually every large city it is initially cheaper to rent than own a home on average. Both studies indicated this was the all time worst time for home ownership compared to renting. I do realize they are not projecting 10 years down the road when possibly there has been rent growth but p&i is still fixed. Or potentially 30 years down the road when the mortgage could be paid off.In emerald coast my underwriting shows cash negative, but my head tells me private beaches are rare. Rare desirable items seem to consistently appreciate faster than inflation and less rare items. If I purchase a condo with a private beach in emerald cost will it appreciate like other rare desirable items?
I do not know how many states allow private beaches, but this is not an Alaska private beach, but an emerald coast private beach. Who would not want to own a private beach at emerald coast? Finite supply.
Good luck
I think a lot of us are in that same boat, Dan! Trying to reconcile what makes sense now vs what used to feel like a slam dunk.
You brought up something super interesting with private beaches. Totally agree, rare and desirable tends to win long-term. In the Emerald Coast specifically, there’s a very limited inventory of condos with true private beach access, and once you add things like strong associations, updated buildings, and walkability, the list gets even shorter. That scarcity definitely helps with appreciation over time, and also gives you a stronger edge with guest demand when the STR numbers don't pencil as easily on paper today.
Out of curiosity, are you leaning toward one specific part of the Emerald Coast? Some pockets are still under the radar compared to Destin or 30A, and I’ve seen some investors find decent value by stepping just outside the most hyped areas while still holding the beach proximity card.
Also if you’re open to it, I’d love to hear how you're underwriting appreciation vs cash flow when you're looking at something like a beachfront condo. I think a lot of us are trying to figure out how to weigh those tradeoffs in today’s market
I have placed offers in 30a using Pete A. exp realty, you probably know him seeing same agency and area. We have not made an offer at emerald coast in over a year, but still have interest. He still sends me automated listings daily.
The complex in 30a we have made offers on has a private beach but you have to cross the main road as the condos in 30a are mostly east of the road. It has multiple pools, ponds, tennis/pickleball courts. From this description you can likely guess the complex. The private beach is a requirement on anything we offer on in that area.
Since ~2022 I have been underwriting 5 years at 0% appreciation, then 4% appreciation after the 5 years in nice markets like 30a, luxury Sierra cabins, beach on west coast, etc. My last underwriting was of a sierra luxury cabin. I did the same underwriting (5 years 0% appreciation). Appears my 0% appreciation was too aggressive in 30a as prices have come down to partially offset the HOA increases.
Cash flow is sustaining cash flow. When I prepped for the emerald coast market, I created a spreadsheet of costs and expected lifespan of all interior items in the condo to calculate an expected maintenance/cap ex allocation. I then used Pete A. as my local expert on the local costs and localized life spans (we have beach units in San Diego, but humidity is higher at emerald coast) to update the inputs for the local area. This always produces a number higher than most people would predict, but ask those people how they obtained their maintenance/cap ex number and you will hear some stupid ways. So most people would look at my underwriting and think it is crazy conservative I think it is more accurate than they expect, but I hope they are right that it is crazy conservative. On the Sierra luxury cabin, I used a rock star co-host in the area to obtained localized inputs. Getting input from localized experts can never hurt.
I believe private beach properties will increase long term better than their general market. I cannot get deals at emerald coast like I have gotten local. I also do not desire a remote value add. So I need something (private beach) that if I am paying retail or close to retail, may provide a profit booster.
Best wishes
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Dan H.:
Quote from @Melissa Haworth:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Congrats on the fish! This comment stumped me:
"I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get."Can you elaborate?
San Diego bonus density law was over turned a couple months ago. It had allowed one additional ADU for each income restricted ADU.
The below was the highest value use of this particular property. Note my protege was not the developer, he sold the lot to the developer for ~$500k over current use valuation.
https://www.cbs8.com/article/news/local/working-for-you/new-...
As indicated the law was changed a few months ago in large part due to this developer.. Developer took some grief as neighbors were not happy. My protege who sold land to developer got no complaints even though he knew developer was going to place a lot of units on the lot (but likely was not expecting this many units).
most jurisdictions have laws that can be leveraged for value add. Rehabs are obvious value adds, not sophisticated as they do not leverage a knowledge that not everyone may have.In ca they just raised the height limit near transit centers. Current use and comps on these properties can be significantly less than the value associated with a repurpose. Note you may not need to be the developer if you find a real good opportunity property. Buy it based on current value and comps, sell it based on highest value opportunity. CA is full of these type of laws.
I am a partner on a project where the bulk of the value add is leveraging a law that allows ADUs to be added out of legal existing space (believe local jurisdiction law). 9 new small units from garage space. We also are rehabbing the units to drive rents up on the existing units. It seems like a good investment and it has worked numerous times previously, but this one is having some issues and will not create the return I was hoping. Does not mean that it is not a good sophisticated value add, but there have been other issues.
Unfortunately many of these sophisticated value adds are jurisdictional specific or at least not national wide.
Good luck
Sorry, "9 new small units from garage space"? That's way outside my knowledge. Can you elaborate? I had no idea something like that was possible. Would also love to understand more about your current deal that your partnering on that is having issues. Is this your primary focus at the moment? Or do you do multiple deals like this simultaneously?
A local law allows you to add as many ADUs as you desire out of legal permitted space. Bought a small MF that had a lot of legal garage space. Best NOI is achieved by maximizing the unit count so all units will be small (studio or 1 BR).
Note this is a jurisdiction specific value add (as are many sophisticated value adds).
No I am actively looking for (some of these are for my son)
- a beginner fkip in San Diego area: we recently placed an offer on a flood damaged condo that was down to studs rehab. Our initial offer was $90k over initial asking price. We were told that there were 5 higher offers. I think selling agent was lying to get a significantly higher offer from us but my son dropped the ball and did not stay on top of it. It sold for $2.5k more than our initial offer. Needless to say we could have beat that offer.
- a mf value add in San Diego for son to house hack. Bonus if it has below market financing. Note because he will OO, he can assume FHA, VA, etc.
- select market STRs. I am not identifying some of these markets but will say I have placed offers at emerald coast condos (specifying that market because it is not below the radar). This is not the market of my last couple of offers.
Thanks for the extra detail, would it be fair to say you are deal flow limited not capital limited when it comes to expansion? Do you ever need/want to find capital partners?
I guess I am deal flow limited because I am not finding properties I purchase. But I get a lot of emails from wholesalers, realtors (including off market listings) p, a couple bird dogs, etc. the reality is most off market offers are not great. The interest rate increase couple with property values increasing significantly more than rents have made the current RE market challenging.
the underwriting on every offer I have made in the last couple of years would not have produced an offer from me prior to 2022. RE market is not what it was a few years ago. In my market RE prices are up substantially more than rents. I saw 2 fairly recent studies comparing renting to owner homes in the various large cities. The two studies both indicated in virtually every large city it is initially cheaper to rent than own a home on average. Both studies indicated this was the all time worst time for home ownership compared to renting. I do realize they are not projecting 10 years down the road when possibly there has been rent growth but p&i is still fixed. Or potentially 30 years down the road when the mortgage could be paid off.In emerald coast my underwriting shows cash negative, but my head tells me private beaches are rare. Rare desirable items seem to consistently appreciate faster than inflation and less rare items. If I purchase a condo with a private beach in emerald cost will it appreciate like other rare desirable items?
I do not know how many states allow private beaches, but this is not an Alaska private beach, but an emerald coast private beach. Who would not want to own a private beach at emerald coast? Finite supply.
Good luck
I think a lot of us are in that same boat, Dan! Trying to reconcile what makes sense now vs what used to feel like a slam dunk.
You brought up something super interesting with private beaches. Totally agree, rare and desirable tends to win long-term. In the Emerald Coast specifically, there’s a very limited inventory of condos with true private beach access, and once you add things like strong associations, updated buildings, and walkability, the list gets even shorter. That scarcity definitely helps with appreciation over time, and also gives you a stronger edge with guest demand when the STR numbers don't pencil as easily on paper today.
Out of curiosity, are you leaning toward one specific part of the Emerald Coast? Some pockets are still under the radar compared to Destin or 30A, and I’ve seen some investors find decent value by stepping just outside the most hyped areas while still holding the beach proximity card.
Also if you’re open to it, I’d love to hear how you're underwriting appreciation vs cash flow when you're looking at something like a beachfront condo. I think a lot of us are trying to figure out how to weigh those tradeoffs in today’s market
I have placed offers in 30a using Pete A. exp realty, you probably know him seeing same agency and area. We have not made an offer at emerald coast in over a year, but still have interest. He still sends me automated listings daily.
The complex in 30a we have made offers on has a private beach but you have to cross the main road as the condos in 30a are mostly east of the road. It has multiple pools, ponds, tennis/pickleball courts. From this description you can likely guess the complex. The private beach is a requirement on anything we offer on in that area.
Since ~2022 I have been underwriting 5 years at 0% appreciation, then 4% appreciation after the 5 years in nice markets like 30a, luxury Sierra cabins, beach on west coast, etc. My last underwriting was of a sierra luxury cabin. I did the same underwriting (5 years 0% appreciation). Appears my 0% appreciation was too aggressive in 30a as prices have come down to partially offset the HOA increases.
Cash flow is sustaining cash flow. When I prepped for the emerald coast market, I created a spreadsheet of costs and expected lifespan of all interior items in the condo to calculate an expected maintenance/cap ex allocation. I then used Pete A. as my local expert on the local costs and localized life spans (we have beach units in San Diego, but humidity is higher at emerald coast) to update the inputs for the local area. This always produces a number higher than most people would predict, but ask those people how they obtained their maintenance/cap ex number and you will hear some stupid ways. So most people would look at my underwriting and think it is crazy conservative I think it is more accurate than they expect, but I hope they are right that it is crazy conservative. On the Sierra luxury cabin, I used a rock star co-host in the area to obtained localized inputs. Getting input from localized experts can never hurt.
I believe private beach properties will increase long term better than their general market. I cannot get deals at emerald coast like I have gotten local. I also do not desire a remote value add. So I need something (private beach) that if I am paying retail or close to retail, may provide a profit booster.
Best wishes
Thanks Dan for the detailed description of how you make projections of your investment returns. When you use these conservative assumptions, what kind of return on cash invested to the numbers work out to predicting?
- 11moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Dan H.:
Quote from @Austin Fowler:
Quote from @Dan H.:
My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed. I chose to train handy people and show them the path of RE which takes time and some of them never choose RE. However my most successful protege (he was also likely my best handyman) is a rockstar investor. He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal. He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.
if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes. If we used a VA, I suspect we could get it down to less than 0.25 hours/unit. To get there we would need to document more of our processes. We have many of our process documentation nearly complete, but not hand off with no guidance complete.
BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire. What I desire is making more money using my intelligence. I also like mentoring select people. Travel, fishing, hiking/backpacking, snorkel/Scuba. What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).
wishing great success to allWould love to hear more about your training and mentoring. Are you still expanding your portfolio? Particularly interested in your short-term rentals. Are you still acquiring those? Have not met really any people that are systematically expanding that aspect of their portfolio. What kinds of real estate do you try to teach people to get into?
We are still attempting to buy STRs.
We recently placed an offer at appraised value, but the sellers want over appraised value. I think they are getting some bad advice and will not be selling any time soon. $475k with projected total rent of $120k with an outstanding co-host. Seems good, but my underwriting shows it to be cash negative until Revenue increases in the future.
I used to advocate BRRRR or house hacking small MF. Now I fear the extract via refi will be cash negative and have the costs associated with the refi. It makes it harder/slower to scale without an extract of the value add, but who wants to scale a bunch of cash flow negative properties? My last purchase as a brrrr never had the cash out refi because rates rose significantly.
I also advocate sophisticated value adds. My most successful protege leveraged a law (since over turned) to sell a property for ~$500k over its existing use. Best part is the grief went to the developer; virtually no one can blame someone for selling a property for as much as they can get.
I caught 19” brown tonight. On this trip I have caught a plump 17”, plump 19”, skinny 20”, and plump 21” brown. Also caught 14” & 15” rainbows. released all but the 14” rainbow which will be dinner (fits nicely in a pan)
Best wishes
Very Nice Brown.. I am currently learning Southern Utah lakes and caught some nice ones so far yesterday got into about 10 nice rainbows 16 to 20 and last Wednesday got a 5 lb rainbow and watched another angler catch some really nice Tiger trout ( hybrid of Brook / Brown ) really cool fish this time of year its leach's
- 11moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
Systems certainly help but asset class plays a critical role as well. Obviously NNN leased properties, particularly those with credit tenants who often possess their own systems and asset management teams provide the most hands-off management. Within the residential/multi-family space more expensive real estate is generally easier to manage. Assuming tenants are screened properly, the tenant is going to require less oversight, and the properties can absorb cap ex easier than lower cost real estate meaning systems can be replaced rather than the need to continually implement band-aid fixes.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Stuart Udis:
Systems certainly help but asset class plays a critical role as well. Obviously NNN leased properties, particularly those with credit tenants who often possess their own systems and asset management teams provide the most hands-off management. Within the residential/multi-family space more expensive real estate is generally easier to manage. Assuming tenants are screened properly, the tenant is going to require less oversight, and the properties can absorb cap ex easier than lower cost real estate meaning systems can be replaced rather than the need to continually implement band-aid fixes.
Thanks Stuart, would love to hear a little bit more detail about your own portfolio. What you have built to date and what you hope to still building the future.
- Accountant · Member since 2024 · 12 posts · 8 votes11moI use baselane to help manage all the “paperwork” side of things. It does rent collection, banking, bookkeeping, supports your tax return prep with automatic tagging. You can get tenant screening lease preparation as well. This makes it much easier to add additional properties because they are all managed in one place even if they are in different legal entities, states, etc.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Nick Litchney:
I use baselane to help manage all the “paperwork” side of things. It does rent collection, banking, bookkeeping, supports your tax return prep with automatic tagging. You can get tenant screening lease preparation as well. This makes it much easier to add additional properties because they are all managed in one place even if they are in different legal entities, states, etc.Hi Nick, what kinds of properties do you manage using baselane? Would love to hear more about your portfolio and how you are growing it.
- Accountant · Member since 2024 · 12 posts · 8 votes11mo
@Nick Litchney I typically do single family homes, and do bookkeeping for multiple entities with various owners for each of them. I even use the system for a small HOA as well. It works great for long term rentals. Pretty easy to scale up due to the ability to tag costs under a specific property or have the set it and forget it rent collection. Their new smart platform has auto tagging as well which can get you to the point you can do a tax filing with little to no effort on bookkeeping if you set it up correctly. Using their built in leases also helps keep everything in one place. I used to use wave and Venmo to do bookkeeping and rent collection but have cut about an hour or two per month of bookkeeping time by moving all my properties and some of my clients to baselane.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Nick Litchney:
@Nick Litchney I typically do single family homes, and do bookkeeping for multiple entities with various owners for each of them. I even use the system for a small HOA as well. It works great for long term rentals. Pretty easy to scale up due to the ability to tag costs under a specific property or have the set it and forget it rent collection. Their new smart platform has auto tagging as well which can get you to the point you can do a tax filing with little to no effort on bookkeeping if you set it up correctly. Using their built in leases also helps keep everything in one place. I used to use wave and Venmo to do bookkeeping and rent collection but have cut about an hour or two per month of bookkeeping time by moving all my properties and some of my clients to baselane.
Are you still actively acquiring single-family homes? Seems like a tough market to cash flow in at the moment. Would love to know if you are having success finding deals and expanding your portfolio. Me personally I've switched to passive multifamily. Am finding this more profitable than my single family long term rentals.
- Accountant · Member since 2024 · 12 posts · 8 votes11mo
@Nick Litchney I haven't been buying much lately and have not seen new bookkeeping clients from new acquisitions (nobody selling and nobody buying). Even my passive multifamily investments have been having a hard time. It's been slow, but not bad (decreasing values) I guess. Just waiting it out and hoping for lower interest rates for now.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Nick Litchney:
@Nick Litchney I haven't been buying much lately and have not seen new bookkeeping clients from new acquisitions (nobody selling and nobody buying). Even my passive multifamily investments have been having a hard time. It's been slow, but not bad (decreasing values) I guess. Just waiting it out and hoping for lower interest rates for now.
Could you elaborate on the types of passive multifamily you are in? In my own case, my entry point was when interest rates peaked and I have a bias towards the ground up development of affordable housing. I'm very happy with how these assets are coming together.
- Accountant · Member since 2024 · 12 posts · 8 votes11mo
@Nick Litchney I invested in some on crowdstreet that I kind of regret doing. One specific one in San Diego that was ground up and has been delayed on completing construction and another that is a private REIT invested in about 30% multifamily rest is office/industrial/retail diversified portfolio.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Nick Litchney:
@Nick Litchney I invested in some on crowdstreet that I kind of regret doing. One specific one in San Diego that was ground up and has been delayed on completing construction and another that is a private REIT invested in about 30% multifamily rest is office/industrial/retail diversified portfolio.
I've had very good experiences with single-asset deals offered by urban-genesis.com and BAMcapital.com. These companies have incredible track records. Are you an accredited investor?
- Member since 2024 · 158 posts · 88 votes11mo
I only have 4 properties but also a full time job. I use Innago property management tool (free) and require the tenants to do minor proactive maintenance: filters, light bulbs, etc. I bought new construction so maintenance will be minimal for the first 10 years. Most time I spend is on advertising and tenant screening. I also require electronic ACH payment.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11moWhen did you buy your properties? Are you still looking to add more properties to your portfolio? Do the current properties you have cash flow?
Quote from @Allison Park:
I only have 4 properties but also a full time job. I use Innago property management tool (free) and require the tenants to do minor proactive maintenance: filters, light bulbs, etc. I bought new construction so maintenance will be minimal for the first 10 years. Most time I spend is on advertising and tenant screening. I also require electronic ACH payment.
- Member since 2024 · 158 posts · 88 votes11mo
@Austin Fowler I bought 3 in the last month and 1 last year. I did a pilot with the first one and it was working well so bought 3 more of the same floor plan with that builder.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Allison Park:
@Austin Fowler I bought 3 in the last month and 1 last year. I did a pilot with the first one and it was working well so bought 3 more of the same floor plan with that builder.
Would love to learn more. Which builder? Where are the properties? Purchase price? Mortgage repayment? Taxes, insurance, other regular monthly expenses? Are they tenanted? What rent are they achieving? What is your net after all regular monthly expenses?
- Member since 2024 · 158 posts · 88 votes11mo
@Austin Fowler The builder is Lennar. You can google Lennar Marketplace. They offer 7/6 ARM financing. All the information is on that site including a financial modeler. They build nationally and are pricing competitively. They offer incentives to cover most closing costs. I some cases they are including appliances. You would need to find tenants.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Allison Park:
@Austin Fowler The builder is Lennar. You can google Lennar Marketplace. They offer 7/6 ARM financing. All the information is on that site including a financial modeler. They build nationally and are pricing competitively. They offer incentives to cover most closing costs. I some cases they are including appliances. You would need to find tenants.
Would you be willing to share the numbers on your deals that attracted you to buying them?
- Member since 2024 · 158 posts · 88 votes11mo
@Austin Fowler the properties I bought were 325-340K and rent for about 2K/month. Interest rates were in the low 4s. I put down about 25%. I plan to hold long term.
- 11moTodd AndersonPro MemberReal Estate Agent · Cape Coral, FL · Member since 2023 · 392 posts · 175 votes
I managed my own properties for many years and when I got beat up by the 08 crash I started managing for others because that is what I knew how to do. There is definitely a burnout factor to management. I sold my Management company a few years back. I finally got to the point of realizing that if you working in your business you can't work on your business. Now i make sure the properties I aquire can handle to cost of management.
To answer your other question, I am still finding cash flowing deals, but now i am investing Out Of State. I talk with may investors from California that have done the same thing. Now that you have managed a property and know the basics, hire someone else to do it. In the grand plan it is not that expensive.
To elaborate right now when I am talking with investors I recommend that they look into Bould to Rent. Prices of new construction have for the first time in many years become lower than existing homes. And the best part of new construction is that the builders can offer incentives that solve for the problems in the market today. Interest Rates many builders are offering great rate buydowns right now. We see many as low as 3.75%. Another incentive would solve for the other problem. Free Property Management, for a number of years. With this type of incentives you can find cash flow in long term investing.
Let me know if I can help more.
Best of luck
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Todd Anderson:
I managed my own properties for many years and when I got beat up by the 08 crash I started managing for others because that is what I knew how to do. There is definitely a burnout factor to management. I sold my Management company a few years back. I finally got to the point of realizing that if you working in your business you can't work on your business. Now i make sure the properties I aquire can handle to cost of management.
To answer your other question, I am still finding cash flowing deals, but now i am investing Out Of State. I talk with may investors from California that have done the same thing. Now that you have managed a property and know the basics, hire someone else to do it. In the grand plan it is not that expensive.
To elaborate right now when I am talking with investors I recommend that they look into Bould to Rent. Prices of new construction have for the first time in many years become lower than existing homes. And the best part of new construction is that the builders can offer incentives that solve for the problems in the market today. Interest Rates many builders are offering great rate buydowns right now. We see many as low as 3.75%. Another incentive would solve for the other problem. Free Property Management, for a number of years. With this type of incentives you can find cash flow in long term investing.
Let me know if I can help more.
Best of luck
That's really helpful. Have you bought from built to rent recently? Would you be willing to share the numbers on a deal you bought from them? I'm very comfortable with investing out of state. Indeed almost none of my assets are in California. Does built to rent have in-house property management?
- 11moTodd AndersonPro MemberReal Estate Agent · Cape Coral, FL · Member since 2023 · 392 posts · 175 votes
Quote from @Austin Fowler:
Quote from @Todd Anderson: I have a number of investments with Build 2 Rent both personally and with investors that I consult. Build 2 Rent is a turnkey solution, they use perfreed venders in each area that they have investments. I would be happy to get you the current inventory, I will send you a private note with the link to the entire off market inventory.
- 11moKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
We have 5 doors right now and it's been pretty simple to achieve scale if you have the right system and buy in good areas. Cash-flow isn't the most important thing because if I want to hold on to a property long-term I want it in a better area
Kerlous Tadres | Reafco Real Estate540 Reviews- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Kerlous Tadres:
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
We have 5 doors right now and it's been pretty simple to achieve scale if you have the right system and buy in good areas. Cash-flow isn't the most important thing because if I want to hold on to a property long-term I want it in a better area
But don't you need cash flow to achieve scale? Without cash flow won't you eventually run out of borrowing power and the ability to feed money into the houses to keep holding onto them?
- 11moKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
Quote from @Austin Fowler:
Quote from @Kerlous Tadres:
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
We have 5 doors right now and it's been pretty simple to achieve scale if you have the right system and buy in good areas. Cash-flow isn't the most important thing because if I want to hold on to a property long-term I want it in a better area
But don't you need cash flow to achieve scale? Without cash flow won't you eventually run out of borrowing power and the ability to feed money into the houses to keep holding onto them?
I would say yes and no. I want cash-flow to protect anything that goes wrong, but I also want properties in areas I trust
Kerlous Tadres | Reafco Real Estate540 Reviews - Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Kerlous Tadres:
Quote from @Austin Fowler:
Quote from @Kerlous Tadres:
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
We have 5 doors right now and it's been pretty simple to achieve scale if you have the right system and buy in good areas. Cash-flow isn't the most important thing because if I want to hold on to a property long-term I want it in a better area
But don't you need cash flow to achieve scale? Without cash flow won't you eventually run out of borrowing power and the ability to feed money into the houses to keep holding onto them?
I would say yes and no. I want cash-flow to protect anything that goes wrong, but I also want properties in areas I trust
Could you elaborate? It is of course good to have properties in areas you trust, but without cash flow isn't there a limit to how far you can scale? With your current numbers, and cash flow negativity, how many houses do you think you could support without negatively impacting your lifestyle? Are you hoping to hold these houses for only a few years and cash in the appreciation?
- 11moMatthew Irish-JonesBusiness MemberReal Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
As many as you want if you build a property management business.
Irish Jones Realty4.947 Reviews- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Matthew Irish-Jones:
As many as you want if you build a property management business.
Have you built your own property management business? How many properties do you want? :-)
- 11moMatthew Irish-JonesBusiness MemberReal Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
@Austin Fowler yes. It's a huge competitive advantage to invest, manage, control, get data, and build your own portfolio while offering services.
Irish Jones Realty4.947 Reviews
- 11moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
Welcome to BP, Austin! Yes — there are plenty of investors who manage their own portfolios and still scale up to 10+ properties, but the key is building strong, repeatable systems rather than just acquiring doors. From the research, you’ll see that when you move from one property to many you shift from landlord mindset into business‐owner mindset: you’ll need standardized tenant screening, maintenance workflows, financial reporting, automation of rent collection, and a clear investment strategy. For example, you’ll want to define your property criteria, set up vendor networks, use property management software (even if you self‐manage), and treat each acquisition as part of a system, not a one‐off. In terms of buying long‐term rentals and achieving positive cash flow — absolutely yes, people are doing it today — the trick is to target markets where property prices are still reasonable relative to rents, keep expenses and financing disciplined, and apply consistent management. If you like, I can pull up some specific markets right now where self‐managing investors are buying long‐term rentals with 1% rule or close cash flow potential. Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9120 Reviews- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Jimmy Lieu:
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
Welcome to BP, Austin! Yes — there are plenty of investors who manage their own portfolios and still scale up to 10+ properties, but the key is building strong, repeatable systems rather than just acquiring doors. From the research, you’ll see that when you move from one property to many you shift from landlord mindset into business‐owner mindset: you’ll need standardized tenant screening, maintenance workflows, financial reporting, automation of rent collection, and a clear investment strategy. For example, you’ll want to define your property criteria, set up vendor networks, use property management software (even if you self‐manage), and treat each acquisition as part of a system, not a one‐off. In terms of buying long‐term rentals and achieving positive cash flow — absolutely yes, people are doing it today — the trick is to target markets where property prices are still reasonable relative to rents, keep expenses and financing disciplined, and apply consistent management. If you like, I can pull up some specific markets right now where self‐managing investors are buying long‐term rentals with 1% rule or close cash flow potential. Happy to connect and answer any questions you have!
Hi Jimmy, would be great to just start with your own portfolio and your own experience. Where are you at in your real estate acquisition journey?
- Accountant · 100% Remote · Member since 2019 · 497 posts · 216 votes11mo
@Austin Fowler I've always had PMs manage my rentals so I won't speak to your first question.
We have bookkeeping clients who are still buying properties and renting them as LTRs but not as many as we used to see. They're buying them directly from sellers at steep discounts and usually including creative finance to drive favorable terms so that they cash flow.
- Time Capital Bookkeeping (REI myself since 2019)
- Member since 2025 · 20 posts · 17 votes11mo
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
We use Appfolio. It's okay, but it gets expensive. The biggest time crunch and stress is when we have to run after a late or non-paying tenant. They play stupid and act like Bambi, that they didn't know we were calling or the rent is past due.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Frank Caulkin:
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
We use Appfolio. It's okay, but it gets expensive. The biggest time crunch and stress is when we have to run after a late or non-paying tenant. They play stupid and act like Bambi, that they didn't know we were calling or the rent is past due.
Thanks Frank, are you still growing your portfolio? If so, what kinds of deals are you able to find?
- Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes11mo
We have about 3600 units and self manage about 2,000 units. Self managing helps you keep cost down, which helps with cash flow and growth. Building good systems is key, from your maintenance team to your on-site leasing. Also, having excellent bookkeeping and data processing.
We are buying apartment complexes in the midwest. It's tough to find deals, but turn enough stones and you'll find something that fits your box. We're looking at a few hundred deals to buy 1.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Todd Dexheimer:
We have about 3600 units and self manage about 2,000 units. Self managing helps you keep cost down, which helps with cash flow and growth. Building good systems is key, from your maintenance team to your on-site leasing. Also, having excellent bookkeeping and data processing.
We are buying apartment complexes in the midwest. It's tough to find deals, but turn enough stones and you'll find something that fits your box. We're looking at a few hundred deals to buy 1.
Sorry... what? You self manage 2000 units?? Can you elaborate? At first reading that seems impossible without working 80 hours a week :-) How many employees do you have?
- 11moV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
I refuse to self-manage because you're just adding layers of liability. The slight savings isn't worth that risk.
I do manage my property managers though and have about 13 different companies for all my SFRs. I created(via a tech developer) an app that gets them to me for all centralized issues, finances, taxes, etc. That same app has another section for the 5 property managers I use for our STRs and the two AI agents that deal with the gnarly stuff STR customers do. And last, but not least, an AI agent that does some CMA through the areas I invest in.
It's let me reconcile our books every Thursday, show where I am in debt/equity, capex forecast, and gives me good info on the markets I am in whenever I load the app which is daily.
That tech investment has paid itself back since in time & money. Cost about $17,000 last year to do it the way I wanted to and I have the support for any failures.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @V.G Jason:
I refuse to self-manage because you're just adding layers of liability. The slight savings isn't worth that risk.
I do manage my property managers though and have about 13 different companies for all my SFRs. I created(via a tech developer) an app that gets them to me for all centralized issues, finances, taxes, etc. That same app has another section for the 5 property managers I use for our STRs and the two AI agents that deal with the gnarly stuff STR customers do. And last, but not least, an AI agent that does some CMA through the areas I invest in.
It's let me reconcile our books every Thursday, show where I am in debt/equity, capex forecast, and gives me good info on the markets I am in whenever I load the app which is daily.
That tech investment has paid itself back since in time & money. Cost about $17,000 last year to do it the way I wanted to and I have the support for any failures.
Impressive, I personally tapped out at three property managers and 32 long-term rentals and then switched to passive multifamily. How many SFRs does 13 property managers correspond to? Are you still expanding?
- 11moCorby GoadeBusiness MemberInvestor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
I'd be wary of leaning too heavily on AI for applications, leases, etc. That's a great way to get yourself in expensive and stressful hot water. Nothing replaces local knowledge regarding laws and liabilities. Sit down with a real estate attorney for a consult at the very least.
As for a direct answer to your question, we started a property management business years ago. We rolled our own properties in and started managing for others. Once we hit about 40 doors, we were cash flowing enough from the management piece that we could start hiring staff. Now we have a full blown operation that not only makes decent money, but they manage our own properties too, perform sales, repairs, maintenance, etc.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Corby Goade:
I'd be wary of leaning too heavily on AI for applications, leases, etc. That's a great way to get yourself in expensive and stressful hot water. Nothing replaces local knowledge regarding laws and liabilities. Sit down with a real estate attorney for a consult at the very least.
As for a direct answer to your question, we started a property management business years ago. We rolled our own properties in and started managing for others. Once we hit about 40 doors, we were cash flowing enough from the management piece that we could start hiring staff. Now we have a full blown operation that not only makes decent money, but they manage our own properties too, perform sales, repairs, maintenance, etc.
Thanks for sharing Corby. Once you hit your stage, what limits the growth of your portfolio? Are you still finding good deals to add? What is your target when it comes to personal doors?
- 11moCorby GoadeBusiness MemberInvestor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
Quote from @Austin Fowler:
Quote from @Corby Goade:
I'd be wary of leaning too heavily on AI for applications, leases, etc. That's a great way to get yourself in expensive and stressful hot water. Nothing replaces local knowledge regarding laws and liabilities. Sit down with a real estate attorney for a consult at the very least.
As for a direct answer to your question, we started a property management business years ago. We rolled our own properties in and started managing for others. Once we hit about 40 doors, we were cash flowing enough from the management piece that we could start hiring staff. Now we have a full blown operation that not only makes decent money, but they manage our own properties too, perform sales, repairs, maintenance, etc.
Thanks for sharing Corby. Once you hit your stage, what limits the growth of your portfolio? Are you still finding good deals to add? What is your target when it comes to personal doors?
Hey Austin- great questions and I probably have disappointing answers, lol. Yes- always finding deals to add. The challenge is reframing how you look at "deals" and income. Close to 50% of our net income comes from tax savings these days, so we are keen to buying B properties in growing areas- if they break even month to month, that's great, but the depreciation, equity and passivity is what we are really after. In the midst of a 1031 exchange right now on a bigger property that will tick all of those boxes and I think it'll be cash flow neutral, which will result in something in the range of $100K back in our pockets next April.
I don't have a goal for doors or income, we only focus on lifestyle and freedom, so we make moves that support that vision and it's treated us very well.
I'm not sure how far you are in to this journey, but the reality is, you'll get where you want to go more quickly by focusing on your end goal in 10-15 years rather than what returns you'll get on month one. The higher the cash flow=cheaper the properties=the less likely you are to actually make a profit. Doesn't make sense on paper, but it's true.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes11mo
I personally manage 34 units. Could handle 3 or even 4 times that many. I don't need to use any special software. Just excel and take applications through zillow.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Eric James:
I personally manage 34 units. Could handle 3 or even 4 times that many. I don't need to use any special software. Just excel and take applications through zillow.
Thanks for sharing! Are you still growing your portfolio? Are all your units local to you?
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes11mo
Quote from @Austin Fowler:
Quote from @Eric James:
I personally manage 34 units. Could handle 3 or even 4 times that many. I don't need to use any special software. Just excel and take applications through zillow.
Thanks for sharing! Are you still growing your portfolio? Are all your units local to you?
Plan to build another small (approx 25 units) apartment complex next year.
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Eric James:
Quote from @Austin Fowler:
Quote from @Eric James:
I personally manage 34 units. Could handle 3 or even 4 times that many. I don't need to use any special software. Just excel and take applications through zillow.
Thanks for sharing! Are you still growing your portfolio? Are all your units local to you?
Plan to build another small (approx 25 units) apartment complex next year.
What governs the decision to invest next year rather than this year? Me personally I am trying to expand my multifamily portfolio before rates drop too much and prices rise too much.
- Investor · New York, NY · Member since 2025 · 92 posts · 71 votes11mo
@Austin FowlerYeah I self-manage and still buy. The secret isn’t more units, it’s fewer moving parts. I stopped trying to scale management and started scaling clarity.
Most of us unfortunately build chaos as we grow: scattered texts, random vendors, rent checks everywhere. I built systems that make the property run itself (most of which is AI). Leases parse automatically, maintenance gets triaged before my weekend dies, and tenants pay through links, not reminders. Once you see your portfolio as a flow of decisions instead of tasks, scale stops being painful.
And yes, I’m still buying small multifamily in the Northeast. The deals that work today aren’t about yield; they’re about control. You win by tightening operations, buying below replacement cost, and running leaner than everyone else.
Hope this helps!
- Investor · Reseda, CA · Member since 2019 · 297 posts · 150 votes11mo
Quote from @Parris Taylor:
@Austin FowlerYeah I self-manage and still buy. The secret isn’t more units, it’s fewer moving parts. I stopped trying to scale management and started scaling clarity.
Most of us unfortunately build chaos as we grow: scattered texts, random vendors, rent checks everywhere. I built systems that make the property run itself (most of which is AI). Leases parse automatically, maintenance gets triaged before my weekend dies, and tenants pay through links, not reminders. Once you see your portfolio as a flow of decisions instead of tasks, scale stops being painful.
And yes, I’m still buying small multifamily in the Northeast. The deals that work today aren’t about yield; they’re about control. You win by tightening operations, buying below replacement cost, and running leaner than everyone else.
Hope this helps!
What typical return on capital invested are you shooting for in a small multifamily deal that appeals to you? Is it something you calculate to determine which deal of those available is best to focus on? Are you self-funded or you do you raise private capital for your deals? How quickly are you looking to grow?
- Denver · Member since 2026 · 5 posts · 4 votes7mo
Randy's experience with 37 units self managed is a great data point. I've been talking to a lot of self-managers at different scales while researching this space and the pattern is consistent. The number you can handle isn't about the units. It's about your systems.
The landlords I've talked to who manage 4-5 units spend maybe 4-5 hours a month total. That's logging payments, maintenance requests, expense tracking, and the occasional property check. The reason it's low is they spent time upfront building a system. Payment tracking. Maintenance logs with dates and costs. Lease calendars showing renewals 60 days out.
The rough breakpoints I keep hearing: 1-5 units is easy with basic tools. 5-15 you need real systems and probably some software. 15-30 is a part-time job. 30+ is full-time or you need to hire help.
The thing that kills self managers at every level isn't the number of units. It's disorganization. If you can't quickly look up when a lease expires, what you spent on maintenance last year, or when a tenant last paid late, you'll burn out regardless of portfolio size. The landlords who scale are the ones who track everything from day one.
- 7moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Austin Fowler:
Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?
Scaled to 24 units before it got to be too much to handle.
What was the breaking point you ask?
Dealing with tenants😣
Chasing rent, trying to patiently listen to their excuses and drama, setting up maintenance appointments, etc.
Dealing with tenants is NOT something that fits into a neat little box:(
You can be a robotic jerk and just send nonpayment messages, start the eviction process and just get rid of complainers - but there go your profits!
Also, once you involve the courts, logic rarely prevails.
Judges will listen to tenants and require you to makre repairs - and then the tenants will retaliate against you for treating them poorly. Missed maintenance appointments and constant complaining to the courts that the work wasn't good enough wears you down.So, at some point it becomes a full-time job, which is NOT what I started out wanting in addition to my day job at the time.
Logical Property Management4.9459 Reviews - Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes7mo
I have clients who self manage 25+ units with full time jobs. As long as the units are in good areas it’s very easy, just put on a lockbox for handymen and turnovers are often nothing even needed here on north side Chicago, rent pretty much never late and tenants all on electronic autopay. If the units are in bad areas it’s an absolutely nightmare self managing with late rents, turnover damages, etc. So completely depends on the grade of area, by nice areas I mean areas with college educated tenants that have 680+ credit. I even have a few CA clients self manage these out of state. Many of my clients use an agent for leasing to save time even when they self manage but does cost them a month of rent, setting up group showings also works well to get it leased time efficiently.
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