blog, multifamily, News

Why I Am Selling All My Single Family Houses..Should You??

I have been buying single family houses in the Sacramento area since 1994. Like many small scale real estate investors I got into real estate when I purchased my first home with dream of building tremendous wealth in residential real estate.

However, I soon realized I would need to buy a lot more houses or wait 20 to 30 years before I would reach the coveted “Financial Freedom” that all of the Real estate “gurus” talk about.

Over the years I have self-managed 10 single family properties and if I had a dollar for every time a family dinner or vacation was interrupted by a tenant call about a busted water pipe or A/C on the fritz, I would be a rich man by now.

At one point I even hired a professional property manager. But the calls kept coming and I was still dealing with tenant issues (major repairs, evictions, etc.) the only difference was I now had to pay a 3rd party for the trouble.

However these issues still did not deter me because I was building equity through principal pay down and property appreciation…RIGHT??

Well back in early 2019 I was dealing with roofing contractors at one property and a overpriced plumber at another when an associate of mine gave me a call and began talking how he was passively investing in Multi family real estate.

It was then when I had my “Ah ha” moment. I decided to challenge the assumptions that I had regarding single family houses to determine it they were indeed worth my time or my sanity!!

VS

As I began to run the numbers on these properties I was absolutely astonished!!

Take a look at the returns of one my Single Family properties here in Sacramento versus investing that same equity in a Multi Family property.

No…your eyes are not deceiving you!!

After a year of managing this Single Family (3bd/2ba) property my return was a measly 3% after expenses. Not much better than if I had just taken that capital and stuffed it under my mattress.

Now look at what happens when investing the same $350,000 in equity into a Multi Family property deal.

When we compare the net operating income from the Single Family property of $10,200 to the Multi-family equity investment of $31,500 we can clearly see that we are missing out on -$21,300 in annual income.

In addition, since Multi-Family properties are professionally managed there are no more late night tenants calls about a broken toilets or hassles collecting late rents.

You can get started in passive Multi-family investing via syndications with as little as $50K and spend ZERO time managing your investment in an industry that produces double-digit returns in almost any economy, pays quarterly cash distributions, has real estate tax benefits, and is backed by a real asset.

Interested?  Start by taking a minute to fill out a Freeman Equity online investor application. The application is the first step in helping us understand which opportunities might be right for you.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *