I just finished a transaction that made the buyer a lot of money. The bottom line is the buyer bought the property and made tens of thousands of dollars in value at the closing table. All this sounds good, and it is. Here is the interesting thing the buyer figured out. He could have purchased more units, could have borrowed more money at 7%, and could have increased his holdings.
But, he didn’t. Why would a guy not increase his holdings and possibly make even more money at the closing table? He is realistic in regarding the amount of time he has to devote to his properties and run them well.
We all know that people who are increasing their holdings are running ragged trying to keep up with everything. We all tend to be optimistic and end up underestimating the complexity and time that it will take to add more units to what we already have.
So, before you add more units take a time inventory, think about how much more can you really devote to your business. Can you delegate? Can you leverage your time by adding some staff, etc? Make these decisions before you buy your next property, not after.