Stockpile houses or go commercial

[David B.]

I was recently contacted by an investor asking why I have not considered investing in large apartment buildings. I currently invest in single family homes and small 1-4 unit apartment buildings. I am a full time investor and very hands on, mainly because I enjoy it. I have owned a small commercial building (8 units) in the past so I'm somewhat aware of the cashflow capabilities. I have been acquiring 5 homes per year on average and have over 25 properties with 80% of them being free and clear. My properties cashflow very well. Should I leverage my current portfolio and go big or stay focused and steady with my current strategy?

I guess because it seems out of my comfort zone of the moment it sounds almost foreign.

How many of you have transitioned from SFH to Large Multis? Do you continue to own a nice amount of SFH? Is this something that I should strongly consider?

[Joel Owens]

It's all about what your goals are. There comes a point in everyone's life when people will take less cash flow for more hands off. As you get older you typically value time more than anything.

I am 38 currently. I don't want to spend all my time working on repairs and dealing with tenants. I don't care what the returns are. I am happier building investments a more hands off way.

The main difference is economies of scale. You will have a point where all those little houses as you grow become harder and harder to manage versus owning a few apartment buildings.