Is it a good idea to only own 1-2 multi families?

Question

Hello, I have been searching for two-three family properties in the Bridgeport CT area for the last year now with minimal luck. I have expanded my radius to include:

Bridgeport, Stratford, Shelton, Derby, Ansonia, Milford, and West Haven.

I am beginning to get discouraged. Part of me is wondering if investing in 1-2 multifamily properties is even worth the hassle? Would the cash flow be worth the time and effort required to maintain these properties? It’s hard enough to find a deal right now, I’d hate to have ended up wasting all my time in the end if I even manage to purchase a property or two.

Thank you!

Samuel Eddinger · Answer

If you want to go on this journey but are not sure about it, make sure to price in property management into your underwriting.  That way, if it is something that you yourself do not want to continue to do, you have purchased the property in a way where you can still make your return profile.

Always remember this is a get rich slow game!

Peter Dorinsky · Answer

I think the question of whether it is worth it or not can only be answered by yourself, everyone has their own level of tolerance and the inconveniences they're willing to put themselves through for passive income, even if you are only looking to invest in 1-2 multi-families. I can relate to your frustration as a new investor myself, no doubt that it can be discouraging when it seems like the deals are few and far in between and are gone just as quickly as they appear. Finding that first deal might just require some extra creativity. Maybe that's not a helpful answer, but I'd say that the majority of BP users (including myself) are on here because we believe in achieving financial freedom through real estate. Never hurts to turn on the BP podcast and listen to testimonials to find some encouragement.

Ran Iarovich · Answer

If the cap right works, why would it not be a good idea? If you have to spend 1 - 3 months analyzing deals aggressively just to find one that would last you various years I think it is worth the time and effort.

Alan Asriants · Answer

Everyone's experience is different.

Personally I like duplexes because I like that:

1. People living in a duplex still can feel like the are living in their own home vs an apartment. This means they would likely take better can of common spaces in the units. they can add their personal touches and decorations

2. I can have them pay all utilities. Its easier to split water bills, have the tenants decide between each other who cuts the grass or shovels the snow when. With more than 3 units, this delegation becomes a headache and people can start to get aggravated with each other. This is less expenses and headaches for me.

3. Likely longer terms. People living in duplexes likely have a garage, backyard, etc in my area. So they have all the amenities they are looking for

4. Less complaints. Less tenants, less complaints between them. A mulit family investor I know said the biggest headache dealing with tenants in a larger building is the conflicts between them.

Hope this helps!

Ray Hage · Answer

I totally understand getting discouraged. It is tough right now to find stuff that cashflows well. Regarding the hassles of being a landlord, yea there are some and it can be extremely frustrating at times but I love it. Most of the time, it is passive. It certainly less stressful on the whole vs any corporate job I had before. Once you get the right tenants and systems in place, you will feel great about it and want to buy even more properties. It is worth it in the long run, even with one or two properties

Alecia Loveless · Answer

@Adrian Gallant Keep looking. You’re in a tough market. You’ve got to be ready to pounce the moment you see a great deal. Opportunity isn’t waiting long at all right now despite there being people “claiming markets are starting to slow down”. Certainly not for great investment deals. This is exactly what the good investors have been waiting for, and in my market there’s a lot of dumb people with lots of cash just looking to buy anything which further complicates things.

If you really want to own real estate you won’t quit.

It can at times get discouraging.

If you just can’t find anything locally then maybe, just maybe, you should get some good books on out of state investing where you also might find more affordable properties as well.

Best of luck!

You can do this!

Josh Young · Answer

That's a good sign that you know what a good deal looks like if it sells quickly, next time you see a good deal you need to buy it as soon as you see it, don't wait a day or two for someone else to buy it.  When I was first getting started an experienced investor told me: do your due diligence, and when the numbers make sense pull the trigger.

Adrian Gallant · Answer

Hello Johnny,I would estimate I’ve analyzed anywhere between 100-125 properties. It’s hard to find properties that cash flow 100-150 per door. My “why” is to simply diversify my income streams and obtain an asset or two. My plan was to straight sell whenever I saw fit.

I would also like to know if the hassle of being a landlord is worth it when I plan to only own 1-2 investment properties.

On the rare occasion I do find a good deal, it’s sold within a day or two!