The overwhelming majority of Landlords out there simply refuse to diversify their portfolios.

With choices like DSTs, RIET, Notes, NN Leasing, NNN Leasing, Oil rights and wells, timber, Nature Gas, commercial properties, gross leasing, and even raw land - land lords stay with SFH and maybe go totally wild and invest in MFH.........and typically in their own back yard.

Moreover, instead of using Sub 2, OWC, options, auctions, tax sales, bankruptcies, REOs and Master leases - the majority stay with just buying off the MLS. Many when they market a place only market it in one way on just one website.

That doesn't really show off much in real estate tools in that real estate investment toolbox. Yet the question becomes why can't i find another deal. I submit if you are looking for a deal just like everyone else, at best you will get results like everyone else is.

Just from an outside looking in perspective.

I just read an article on B P labeled the great stall out has begun. May i recommend why if that is true, that now and in the near future might be a great time for you beef up and diversify your portfolio. That really starts out with education and training. Please go to a local real estate investment group (TYPICALLY NOT THE SAME AS A LAND LORDING GROUP) and find yourself a mentor and/or partner.

Additional, make sure you understand your why. For many they say it is to help fund retirement years, yet they don't have a self-directed account opened up yet. Make me wonder if they are landlord because they like people.

You are so right, diversification is key over a long term holding period - 15 to 50 years. However, most landlords aren't schooled enough to stay on top of shifting times. With changing laws, tax codes, insurance needs etc.

Thanks RayRay!

6er, you don't have to become an expert in all those things. I go to Conventions to listen and learn, and hang out with people like Ray who DO know and can advise me. He helped me get the ball rolling!

Rentals are USUALLY a good investment but not in all areas and not always for the long term because local & state markets and laws change.

Every long term LL knows their property values and rents MIGHT go up but newer folks forget they also go DOWN!

Example: on one day the local major employer laid off 3,000 workers in our town of 50,000. That hit ALL businesses HARD.

At a recent Mastermind many RE investors were purposely investing in other states as a form of diversification for the everyday ups and downs.

I'm currently diversifying by selling off rentals as they come open and 1031ing into DST for the same cash flow without the rental headaches. Investing a fund with group of buildings with rents paid by Tractor Supply, Hobby Lobby, Sprouts, Home Depot, medical builing.

God's Word says to divide your crop into 7 baskets.

BRAD

One perspective is, "Don't put all your eggs in one basket."

Another perspective is, "Put all your eggs in one basket, and then work as hard as you can to protect it."

(Andrew Carnegie paraphrase.)

While a lot of people who have lots-of-money will diversify, usually, they don't obtain the original lots-of-money through diversification. They obtain the original lots-of-money through doing one thing really, really well.

Ray Kroc and McDonalds. Henry Ford and automobiles. Carnegie and steel. Hilton hotels. Bill Gates and Microsoft.

So when you say, "an outside looking in perspective", it lessens the impact of the initial argument--- which is, all these people fail to do this thing, but I also fail to do this thing.

For a stall, it means that prices remain high--- so would it make more sense to cash out on houses on the gamble that they're part of an overpriced bubble, or would it make sense to hold on to houses on the gamble that prices will remain elevated, if not due to market circumstances, then at least as a protection against inflation?

Ray- Im curious what the "great Stall out" is meaning? Meaning there is less people being born and the population is stalling?

As for diversification, I would greatly encouraged RE investors to do it... but its really hard to do when you first start or don't have mass $$ to pull it off yourself. Lack the funds, the knowledge...

My personal RE investing journey... family was basically all residential rentals and little bit of farmland rental income when 2008 hit. that hurt.... sold the home farm in 2016. Had multi units, a few houses, warehouse/flex space, office building in another county, retail strip mall then. Covid hit, had some vacancy... but the business kept on moving like nothing was wrong.

That article believes that pattern that existed since 2022 will continue.

If you are in a more expensive marketplace especially, affordability has been challenging for both tenants and investors alike. Many investors are unaware that 40% of all houses in the US are free and clear. this is largely due to the age of the owner. It will take some time for much of that wealth to pass onward. For my SFH purchases, I think you are plum crazy if you are buying off the MLS.

In more affordable marketplaces, there are still small increases in price and rents. 23 of the top 50 largest markets showed decreases. Factors like insurance and taxes matter today. Rent controls will mean more in the future.

40% SFH

25% MFH

20% Gross rental Commercial

10% NNN rentals

5% OGM wells and rights

I bought my first commercial place as a 50% partner of someone who knew what they were doing.

The expense/income ratios for commercial were better and the hassles were far fewer. The drama disappeared with these places too.

I bought my first commercial place as a 50% partner of someone who knew what they were doing.

The expense/income ratios for commercial were better and the hassles were far fewer. The drama disappeared with these places too.

I've gotten "tired" of my job the past several years. My kids always were going to take over but they just aren't at a point in their lives to do it yet. They know what I have and they know what to do but with their jobs and families, they don't have the time for the commitment involved. A few years ago I went from my cash cow multi units "in town" to suburban type single family houses. I hate everything about it and should have stuck with what I knew for the prior 45+ years. Not that I have lost money but it's an entirely different world.

So now I have been thinking commercial (small strip centers, medical centers, etc.) I haven't talked to a broker yet but have just been looking to sort of get the lay of the land. I apparently am not figuring something right because properties with the NNN leases in place selling for $1 to $2 million in my area will have my investment returned to me within three years. Seems too good to be true.

I had asked here previously about investments for accredited investors and the general outcome for me was - nope. I still read and look at offers but I'd be so uncomfortable I just don't want to do that.

I am in the same boat of trying to sell a few SFHs where the city is getting too unreasonable on rental occupancy certificate and inspection process. I bought mine long time ago, and value went up at least x4 times now. I don't want to buy more rentals or anything that gives me more headache. Was thinking about exchange into land? I have no experience buying land though. Is it a lot of maintenance ( grass etc) what about liability? if anything happens or any one get hurt on my land?

Nicole

When you have some answers I would love to hear them. I’m in a similar situation except that the kids have made it pretty clear that they would never take over.

I thought about doing exactly what you did, buying SFH in the suburbs instead of multis eventually. I would make less but the hope is that there is less management. Now I’m leaning more towards some retail and DSTs. I have a couple of DST investments now and it’s been good so far. The deposits just show up in my account every month.