Thanks so much for your insightful replies, MortgageRX & Realty Check. I really appreciate you both taking the time to respond.
MortgageRX,
You make a great point about the taxes...in your argument I guess one would have to teeter the slippery slope of buying a building that's assessed lower (hence, usually older/lower grade) to that of one that's assessed at a higher amount. Point well taken. Thanks!
Realty Check,
Great advice. I guess each investor has to work with what he/she's got in their respective area...which offers me a perfect segway into another question, how do you define "area"? Is it within 20 minutes of where you live, your state, Northeast, or entire east coast? For example, you mentioned that the larger apt buildings are pretty rare in your parts...hypothetically speaking, what would hold you back if you were actively involved with large scale multifamily from going outside of immediate vicinity to purchase a building? I've yet to even to develop the courage to look outside my area. Proximity gives me comfort, I guess. My good friend from high school, on the other hand, is buying left and right in Texas, Arizona, etc. No fear.
I've entertained the idea of purchasing a larger unit building (via 1031 exchange), but I also had the same type of formula in my head of 300% (or, owning several buildings free and clear each with their own respective emergency funds) because I know I would worry myself into some type of cancer if I had to depend on that one building. I've decided to wait, for now, especially with the appreciation rates of smaller scale multifam currently in my area (approx 33% per year). Some of the 3 family homes in West Hartford, for example, are selling for 350K, at the same time that a 32 unit just sold for a meager (realtively speaking) 600K. Thank goodness for the emotional multifam homebuyer. :-) At this rate, I'll be able to sell and pay with cash...or, perhaps this pig is going to get slaughtered (like in my previous life as a tech stock dabbler :-)).