The longer I invest in multifamily, the more I think most aspiring real estate investors should avoid it completely. I find myself unintentionally talking young guys out of it quite a bit, especially those guys that have mastered duplexes and smaller deals. Multifamily looked so appealing in the party days, I know. Rates gently dropping, rents consistently growing. All masked the difficultly of actually operating apartments. So many were fooled into thinking (or sold by gurus) that a 240 unit building is just as easy as an 8 unit building. Why not scale up? Because it’s not easier. What a ridiculous assumption. You can manage an 8 unit building yourself. You don’t need a property manager, an assistant, and two full time techs. You don’t need $20 million in personally guaranteed debt or to raise $10 million of LP capital. You miss your numbers on an 8-unit, what’s your maximum financial impact? Tough, but totally recoverable. If you’re off on your underwriting or capex budget on a $30M deal by 20%, you just lost $6M. That one big deal has enough downside to crush you if done poorly. Meanwhile, you could go do a couple BRRRRs in your city and make good money. Or at minimum, less stressful money. There are benefits, of course, to scale. They simply take years and years to manifest. Eventually, you may build an elite team, business, and system that can operate without your boots on the ground. That’s the dream. You may have a roster of investors that trust you, excellent deal flow, and a machine that delivers for your investors and yourself and your staff and your residents. But it’s not all sunshine and lollipops, and most don’t get there. I advise serious caution before assuming bigger must automatically be better.