3 SFH Rentals | Goal is 50 units

Rental Property Investor · Toledo · Member since 2023 · 9 posts · 12 votes

My wife and I started buying out of state SFH Rental Properties in 2022. We have 3 so far with a goal of 50 units within the next 4-5 years. Primary focus is Sec 8 tenants when possible.

Our current units are in Toledo and plan to start buying in other areas of Ohio.

I'm currently exploring the best options to pull the equity out of my current properties.

I'm looking forward to learning and sharing as we grow.

Thanks,

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Stuart UdisPro Member

Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes

@Garrett Dube Why 50 units? Do you believe the xyz amount per house in rental income multiplied by 50 will be your early retirement? Keep dreaming. That's not how this business works. Whenever I read investor posts about unit count goals and utilizing section 8 rentals as the vehicle to scale a portfolio it loosely translates to buying real estate without paying attention to the fundamentals in the markets where they invest. You can own 1000 units and get crushed in this business. You can also own a handful do quite well. Your focus on an arbitrary unit count isn't indicative of success and can lead to bad investment decisions.

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Samuel DioufBusiness Member
Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
2y
Let's go!! 50 units in 5 years is definitely possible with the right strategy.
What are your guys' reasons to venture to other areas of Ohio? Cleveland is another great market for cash flowing section 8 rentals and Columbus is a market that will bring you guys appreciation.
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
2y
@Garrett Dube Why 50 units? Do you believe the xyz amount per house in rental income multiplied by 50 will be your early retirement? Keep dreaming. That's not how this business works. Whenever I read investor posts about unit count goals and utilizing section 8 rentals as the vehicle to scale a portfolio it loosely translates to buying real estate without paying attention to the fundamentals in the markets where they invest. You can own 1000 units and get crushed in this business. You can also own a handful do quite well. Your focus on an arbitrary unit count isn't indicative of success and can lead to bad investment decisions.

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Ko KashiwagiPro Member
Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
2y
Love to see the ambition. Are you planning to go from 3 to 50 just based on rental income or with value add? It's tough to get to that scale without having a massive driver of income or value add. Good luck!
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Brad S.
Investor · Pasadena, CA · Member since 2017 · 612 posts · 523 votes
2y
Quote from @Stuart Udis:

@Garrett Dube Why 50 units? Do you believe the xyz amount per house in rental income multiplied by 50 will be your early retirement? Keep dreaming. That's not how this business works. Whenever I read investor posts about unit count goals and utilizing section 8 rentals as the vehicle to scale a portfolio it loosely translates to buying real estate without paying attention to the fundamentals in the markets where they invest. You can own 1000 units and get crushed in this business. You can also own a handful do quite well. Your focus on an arbitrary unit count isn't indicative of success and can lead to bad investment decisions.

That's exactly my first reaction reading similar posts. My guess is you (the OP) really don't mean 50 units, but are after more of a cashflow goal, etc. Owning 50 bad units, will probably not get you to your goals. I have had multiple units in the past that dragged my down a lot more than propelled me forward, and I was happy to dump those. I suppose it could be more of a semantic thing, but seasoned RE investors understand it isn't all about the unit #'s, especially when it comes to section 8.
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Garrett Dube
OP
Rental Property Investor · Toledo · Member since 2023 · 9 posts · 12 votes
2y
Quote from @Stuart Udis:

@Garrett Dube Why 50 units? Do you believe the xyz amount per house in rental income multiplied by 50 will be your early retirement? Keep dreaming. That's not how this business works. Whenever I read investor posts about unit count goals and utilizing section 8 rentals as the vehicle to scale a portfolio it loosely translates to buying real estate without paying attention to the fundamentals in the markets where they invest. You can own 1000 units and get crushed in this business. You can also own a handful do quite well. Your focus on an arbitrary unit count isn't indicative of success and can lead to bad investment decisions.

Thanks for the feedback. 50 is the number we have calculated based on average cashflow and it's a target we are working towards. This is the current plan, it may or may not change throughout the execution of our plan in process.
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Garrett Dube
OP
Rental Property Investor · Toledo · Member since 2023 · 9 posts · 12 votes
2y
Quote from @Brad S.:

Quote from @Stuart Udis:

@Garrett Dube Why 50 units? Do you believe the xyz amount per house in rental income multiplied by 50 will be your early retirement? Keep dreaming. That's not how this business works. Whenever I read investor posts about unit count goals and utilizing section 8 rentals as the vehicle to scale a portfolio it loosely translates to buying real estate without paying attention to the fundamentals in the markets where they invest. You can own 1000 units and get crushed in this business. You can also own a handful do quite well. Your focus on an arbitrary unit count isn't indicative of success and can lead to bad investment decisions.

That's exactly my first reaction reading similar posts. My guess is you (the OP) really don't mean 50 units, but are after more of a cashflow goal, etc. Owning 50 bad units, will probably not get you to your goals. I have had multiple units in the past that dragged my down a lot more than propelled me forward, and I was happy to dump those. I suppose it could be more of a semantic thing, but seasoned RE investors understand it isn't all about the unit #'s, especially when it comes to section 8.
50 is the target based on average cashflow. It may change over the course of our growth.
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Garrett Dube
OP
Rental Property Investor · Toledo · Member since 2023 · 9 posts · 12 votes
2y
Quote from @Ko Kashiwagi:

Love to see the ambition. Are you planning to go from 3 to 50 just based on rental income or with value add? It's tough to get to that scale without having a massive driver of income or value add. Good luck!
Thanks. Value add on current properties and utilizing our W2 income towards additional properties.
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
2y
You are still missing the point. You are trying to build a portfolio as if you have a crystal ball and already know how each property will operate after they are purchased. Take a step back and ask yourself why you purchased the first three single family homes in your portfolio and ask that same question each time you are considering making a purchase. If your decision making is tied to cash flow projections you are likely ignoring the fundamentals that are more telling of the properties long term success. Most cash flow or door chasers fail to understand this and that's what leads to bad investment decisions.
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Account Closed
Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
2y
There was just a discussion about how section 8 in Toledo is terrible and not worth it.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Stuart Udis:

You are still missing the point. You are trying to build a portfolio as if you have a crystal ball and already know how each property will operate after they are purchased. Take a step back and ask yourself why you purchased the first three single family homes in your portfolio and ask that same question each time you are considering making a purchase. If your decision making is tied to cash flow projections you are likely ignoring the fundamentals that are more telling of the properties long term success. Most cash flow or door chasers fail to understand this and that's what leads to bad investment decisions.

I thought the same thing and scaled up rather quickly to 300 units in deep south 95% section 8 after about 18 months I realized I bought myself a job that was simply not worth it.. So I sold out to my partners at the time.. Best decision I ever made. they went on to basically lose the portfolio as 2 steps one back.. theft non pay trashed units.. simply not a sustainable model.
I then switched to no debt A class only takes a few of those to hit that magic 10k a month NET cash flow with basically zero drama.. and only a handful of props to manage .. owing 50 houses has major work load if they are section 8.. that was my experience .. I actually wanted to own 5000 of them.. and probably could have gotten there but holy cow Juice no way worth the squeeze. I will leave landlording section 8 to others.
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Garrett Dube
OP
Rental Property Investor · Toledo · Member since 2023 · 9 posts · 12 votes
2y
Quote from @Account Closed:

There was just a discussion about how section 8 in Toledo is terrible and not worth it.

I've heard that from several people. I'm not sure what makes it so terrible. My 3 units are generating over $500 per month, per unit, after everything, MGMT, MAINT, Mortgage. I'll try to find the discussion you're referencing.
0 Reply
Garrett Dube
OP
Rental Property Investor · Toledo · Member since 2023 · 9 posts · 12 votes
2y
Quote from @Jay Hinrichs:

Quote from @Stuart Udis:

You are still missing the point. You are trying to build a portfolio as if you have a crystal ball and already know how each property will operate after they are purchased. Take a step back and ask yourself why you purchased the first three single family homes in your portfolio and ask that same question each time you are considering making a purchase. If your decision making is tied to cash flow projections you are likely ignoring the fundamentals that are more telling of the properties long term success. Most cash flow or door chasers fail to understand this and that's what leads to bad investment decisions.

I thought the same thing and scaled up rather quickly to 300 units in deep south 95% section 8 after about 18 months I realized I bought myself a job that was simply not worth it.. So I sold out to my partners at the time.. Best decision I ever made. they went on to basically lose the portfolio as 2 steps one back.. theft non pay trashed units.. simply not a sustainable model.
I then switched to no debt A class only takes a few of those to hit that magic 10k a month NET cash flow with basically zero drama.. and only a handful of props to manage .. owing 50 houses has major work load if they are section 8.. that was my experience .. I actually wanted to own 5000 of them.. and probably could have gotten there but holy cow Juice no way worth the squeeze. I will leave landlording section 8 to others.
Wow, that's impressive! We have been pretty lucky with the tenants we have placed with minimal turnover, 1 eviction and that was non section 8. Thank you for sharing!
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