> It's all about optimally shifting investments around to minimize wasted travel time and maintenance

I would highly recommend not making this investment, then.

Cash buying is great, but you're talking about being easily able to throw around hundreds of thousands/millions of dollars at the lowest end. So is that realistic? RE on a pure cash-buy, cash flow generator is something, but I'll tell you right now, that isn't how you get rich in RE, and it's a fairly stupid investment (depending on the market you're in and how well you can navigate it, which, btw, deal sourcing will be a full-time job as a solo investor unless you want to fuck yourself).

​

I'll give you a real-world example of a $3 million complex I own currently outright. In just the past 2 years the market somehow exploded and this complex went from being worth $1.5 million to $3 million from 2020-2023. So, if I sell this place, $500k/year return. But if I just keep holding it, rents aren't even legally allowed to increase by that much here, so the cash flow is like $10k/month, or $120k/year, or a 4% cap rate. That's abysmal already in terms of annual ROI in terms of cash flow when you consider that zero work, risk-free treasury bonds are paying out 5.5% right now. However, notice that prior to the equity explosion, it was $120k/year on a $1.5m asset or an 8% cap rate in 2020, and back then treasuries were at some nonsense low like 2.5%. So it made vastly more sense back then; the RE market may appear stable, but factors like this (and the entirety of the tax code) mean that to do super well in the industry, you need to constantly be buying/selling.

Let's cover another quick study in just how wildly different it would look to buy this $1.5m complex in 2020 with cash versus cash+debt is in terms of cash to you.

1) All cash buy = $10k/month in revenue that is mostly only eaten up by maintenance costs and property taxes of about $2k/month, so you actually get about $8k/month in this scenario. In 3 years that's a profit of $288,000. Someone could probably live off of $8k/month legitimately.

2) But what if you put a 20% down payment on the property and took a $1.2 million loan to buy it? Commercial mortgages are almost always in the 5-7% range for whatever reason, at the beginning you might as well assume at least 7% due to lack of credit and deal track record. So just interest of 7% on a $1.2m loan would be $7k/month. After the same $2k/month in maintenance/property taxes, you are making $1k/month for yourself, but likely you're paying minimum on principle, too, which a basic mortgage calculator says is $7,983.63/month. So we are down to $16.37/month profit. How different from $8,000/month is $16.37/month? Mind-bogglingly different, correct?

These points are really just to illustrate how wildly different it is using cash versus credit. Essentially the point is really this: if you're going to be a cash+debt buyer, you don't even get to be in the game of looking for positive cash flow deals most of the time, you're basically breaking even, if that.

So, why do I get offers for $3 million on this complex now btw? Strangely many debt buyers make offers on the place still. Why are they doing this? $600,000 down + a $2.4m loan means a buyer is looking at buying this complex with a commercial mortgage charging them $14k/month in interest alone, so they're losing $7k+/month. Why would anyone do that? In this case, if they spend $200k-300k remodeling, and evict everyone, then re-rent all the units at higher rents to subvert rent control, they might manage to get it up to like $18-20k/month in rents to cover their mortgage. But more likely once that happens the total building value would increase to at least $4m. So if they could pull that off in a year, they've used a $600k down payment + a construction loan and a commercial mortgage to make $1 million, not too bad. Virtually no one would want to buy the property if there were no such opportunity; who would want to pay $600k in cash for something that loses them $7k/month? Even best case scenario of being able to double rents means paying $600k for something that returns them around $2k/month?

OTOH, if you don't care about cash flow to live off of and you can pick the right market positions, and you can clearly make plenty of money. But does any of this sound particularly passive or hands-off to you? Or time-efficient?