Real Estate Professional · Minneapolis, MN · Member since 2017 · 10 posts · 5 votes
I have a full time job but I want to be a successful real estate investor. I did some investing in the Atlanta area before the crash with no real education and made huge mistakes. I'm ready to conquer my fears and jump back in. I am in the Minneapolis Market and have been listening to Bigger Pockets for a few weeks. I'm not sure if I should start with rentals of single family homes or multi-family homes. I would also like some guidance regarding locations in the city that are sound investments. If there is anyone that is experienced in the Minneapolis Market that could provide some guidance that would be great.
Rental Property Investor · York, PA · Member since 2017 · 377 posts · 315 votes
9y
@Katherine Lankford - it will mostly depend on the market that you look to invest in. There may be high demand for single family rentals, or there might be a high demand for multi family.
Both have their benefits and cons, both can be successful. Most people will argue that multi family is easier to scale, while others will swear by lease-options or the equity possibilities in single family.
What interest you, and what market do you want to invest in? Figure those out, and you'll have a better idea of which one to invest into.
Real Estate Professional · Minneapolis, MN · Member since 2017 · 10 posts · 5 votes
9y
Thank you both for your suggestions. Tiffanie I will have to investigate what it means to house hack :-) Ben, both actually interest me. It was my thought that a multi family would bring in more cash flow however I understand that they are normally a little more expensive and I was not sure how quickly they appreciate in value. I will continue to do my research and I may have more questions but I will let you know when I decide. Thank you so much to the both of you for taking time to respond to my question.
Real Estate Agent · Minneapolis, MN · Member since 2014 · 40 posts · 30 votes
9y
Hi Katherine,
To answer your question about house hacking - that is where you live in the property (or part of it) while renting out the rest. This allows you to get really attractive financing options (think lower down payment, better interest rates...) and potentially boost the return on your investment.
I would love to talk with you about different investment strategies, and what would make sense for you in the Minneapolis market. As both a personal investor, and a real estate agent I could get you started and make sure you are pointed in a winning direction.
Real Estate Professional · Minneapolis, MN · Member since 2017 · 10 posts · 5 votes
9y
Thanks Eric. I looked it up last night, had to know :). House Hacking is not going to be a good fit for me right now but I would love to speak with you about investment strategies in the Minneapolis Market.
Investor · Minneapolis, MN · Member since 2012 · 187 posts · 117 votes
9y
@Katherine Lankford I have a full time job plus own three townhomes in the suburbs now and a duplex in Minneapolis. I would be happy to share my strategies with you and also my opinion of where are good areas to buy and good types of properties for renting.
Investor · Minneapolis, MN · Member since 2017 · 11 posts · 22 votes
9y
Duplexes often offer the highest ROI vs any single family properties. You can often obtain a duplex for a slight premium over a sf in the same neighborhood. The rents are close to double that of a sf residence. I believe it is a bit of a fallacy that sf homes appreciate faster than a duplex. If that was true, with compounding the sf home would be worth multiples of what a duplex is, and that is not the case. We may eventually see duplexes increasing at higher levels than sf homes due to the rental demand. I could go on and on about duplexes, but I will end with one more: the opportunity to invest in them is more likely than any other multi-unit because of sheer numbers 13k duplexes in Minneapolis vs 954 4 Plexes in the city....
Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
9y
I own SFH's/duplexes/triplexes/4 plexes. As Jason mentioned, any multi family property easily beats a SFH on ROI. I find the bigger the property in sq footage/number of bedrooms, the more profitable it is for me. It's also true that bigger higher value/more expensive properties deliver higher returns for me so don't try to buy cheap as it often is short sighted. I only keep SFH to renovate and sell after a year and a day of renting.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
9y
The poster is asking for advice between options of buying single family or multifamily for buy and hold investments. Pleas stay on topic and refrain from soliciting services which is a forum violation and may only be done in the marketplace forum.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
9y
Katherine, to answer your question, if you are looking strictly at a cash flow play to generate income, then multi family will almost always outperform single family. If you are looking o have a combination play of small cash flow ( or perhaps negative cash flow) with expectations of appreciation, along with the ammortizationa dan depreciation benefits, then single family may be the better vehicle.
My very first investments were single fa,I,y rentals out of state and if I had to do it all ove again knowing then what I know now, I would have skipped that and gone straight to large multi family deals and partner with other investors and operators in that space. The economies of scale and professional onsite management make that vehicle truly passive (on e the due diligence phase is over). The options of value add plays, tax benefits, and ability to get cash out refi funds tax free are also huge benefits in that space.