"Just get to 100 doors." - every guy trying to sell you a course.

"Just get to 100 doors." - every guy trying to sell you a course.

Real Estate Consultant · Houston TX · Member since 2021 · 122 posts · 92 votes

I know a guy with over 100 doors. Some months he clears less than $1,000.
Not

$1,000 per door. $1,000. Total. After running an entire portfolio the

size of an apartment complex, working nights and weekends, fielding

calls, chasing rent, replacing water heaters, the number at the bottom

of the page some months is less than what a lot of people make in a

single week at a job with a lunch break.
But sure. More doors.
Here's

the math not on the flyer at that REIA meetup: single-family rentals

don't scale efficiency the way multifamily does. Every door is its own

roof, its own HVAC, its own tenant, its own eviction risk, its own

vacancy period, spread across a dozen different zip codes instead of one

building. You're not running a portfolio at that point. You're running

100 tiny, unrelated small businesses, badly, at the same time.
Add

in property management fees eating 8-10% of gross rent (if you're not

self-managing yourself into a breakdown), capex reserves nobody actually

sets aside until the roof proves them wrong, and financing 100

individual mortgages instead of one commercial loan, and "door count"

turns out to be a vanity metric, not a wealth metric.
The guys selling the "more doors" dream aren't lying about the doors. They're just not the ones showing you the P&L.
Real

question to ask before you scale anything: not "how many doors can I

get to," but "how much am I actually keeping per door, after

everything." A guy with 8 doors clearing $6,000/month cash flow is doing

better than a guy with 100 doors clearing $1,000, and sleeping better

too.
More doors doesn't mean more wealth. Sometimes it just means more problems, spread thinner.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    1mo

    How much is his portfolio growing in value?

    Maybe he planned & accepted the low cashflow in exchange for appreciation?

    • Real Estate Consultant · Houston TX · Member since 2021 · 122 posts · 92 votes
      1mo
      Quote from @Drew Sygit:

      How much is his portfolio growing in value?

      Maybe he planned & accepted the low cashflow in exchange for appreciation?


      He didn't plan for self managing 100 doors. Most people with 100 doors didn't "plan" to get that many and they wind up building a castle with no doors to escape it. If he can survive 10 more years some will start being paid off. But market shifts in housing cost/rents, effected lots of people, depending on when / how they purchased. A majority of people I know who hold 25+ doors don't cashflow like they thought, that is because SFH don't scale the way Multi-family does.
  • Michael K GallagherBusiness Member
    Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
    1mo

    sounds like the guy you know is inefficiently managing 100 doors, or purchased 100 doors and didn't account for correct rehab/capex needs.  To your point though this has been, is currently and always will be a details and nuanced business, but to your point more doors is not always better, just like a company with 3 mill in revenue might run wiht more profit than one with 3 billion in revenues, its up to the goals and objectives of the owner and investor at that point.  

    • Real Estate Consultant · Houston TX · Member since 2021 · 122 posts · 92 votes
      1mo
      Quote from @Michael K Gallagher:

      sounds like the guy you know is inefficiently managing 100 doors, or purchased 100 doors and didn't account for correct rehab/capex needs.  To your point though this has been, is currently and always will be a details and nuanced business, but to your point more doors is not always better, just like a company with 3 mill in revenue might run wiht more profit than one with 3 billion in revenues, its up to the goals and objectives of the owner and investor at that point.  


      Obviously, but that is the majority of portfolio owners I meet. Most people can handle 2-10 homes okay. But SFH don't scale the way Multi-family or CRE does. The management of all those insurance policy, loans, tenants, maintenance contracts, etc, etc, etc, its just another job with worse hours and no guaranteed pay.
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