looking for advice on the experts out there:) if some of you have time to respond I thank you in advance I would like a PRO vs con stand point on which would you feel to be a safer first rental investment property single family house or a duplex? me personally I don't feel to much of a difference on building structure 1 roof x amount of walls just seems bigger space obviously 2 tenants on a duplex = more calls and issues via them as well as double the appliances to maintain but also double the rent just wanted to pick a few brains and see what people that have walked the walk so to speak feel about it:) thanks in advance
You maximise income through # of doors. SFHs rarely have much cash flow and are higher risk investment. 1 vacancy is a loss of 100% of income.
Research the eentir BP web to learn more before you decide to move forward. There is a ton to learn before you are ready to invest.
oh yes bp is the best safety net for learning rather get as many dunb questions off of my chest then run into a situation latter😃
@Allan Anderton I'm a big fan of multifamily because its the best way to get bang per buck in any market. As mentioned previously saftey in your investments come with numbers. If I have 2 units and one is becomes vacant I still have half of what I expected to get meaning it will be a leaner month but not very hard with 0 income if I only had a single rental unit. This princaple is then scaled where professional investors with 20+ units expect to have 1 to 2 units vacant at a time but they have been smart with their investments and that vacancy doesn't hurt them due to the other units being filled.
Furthermore duplexes are easier to manage if you buy one closer to where you live. If you live in Sandy and have a duplex in Midvale its easier than having 2 single family houses in different locations say Cottonwood Heights and West Jordan.
The final part I would bring up is Multifamily units will be easier to be used for portfolio loans in the later games because it meets the physical definition of packaged real estate.
thank you Jackson i am shooting for a duplex but man there a rare find in the valley
Not sure if you're still looking for a duplex but I thought I'd share this with you...
Here's a duplex in Midvale that is going to be under construction soon. You could bring your own builder if you wanted to save money. This would be about a 5.7% CAP when renting out for $1,500.
@Allan Anderton I agree with what the other guys. I would go for a 4 plex if you can afford the down payment. 1-4 is basically same the but just gives you more doors with a similar loan and small down payment.
I hope this helps.
I would love to go to 4 plex but i would need 20-25% down correct? As i have my main house and the wife would sell me before she let me rent it😩
@Allan Anderton you could by a 4 plex with Mountain America's 10% down investor loan. The interest rate is higher but if the numbers work it's awesome. No mortgage insurance either.
I want to give you a different opinion. I personally love investing in single family. My reasons: I find them easier to manage. My cash flow is great per door. There are no tenant to tenant issues and my favorite the appreciation and exit strategies are endless.
If you get in and find you hate real estate investing it's easier to get out. Selling to a retail buyer, flipper, investor or flip it yourself after your renter trashes it. Selling a multi-family is not to hard as a duplex honesty in Utah so many duplexes sell almost if they are a retail purchase because many "investors" buy them where they move in. They are looking for the second unit of offsetting their mortgage not necessarily cash flow if both units are rented which is a problem I see over and over when they come up for sale.
The biggest downfalls of single family investing. You can only have 10 with normal loans, You have 10 roofs, ten HVAC ect. Also mentioned above having a renter moves it's 100% vacant. Single-family vacancy in Utah is under 3% and every time I have a unit come up I have a great pool of applicants. Anytime it's vacant for me is lack of planning on my part not being able to find a good renter.
If you have a small cash reserve single family is a good way to get your toes wet.
Thank you @Becca Summers right now I am still getting my down going I have about 50-75k in equity in my first house but I want to get rid of some credit cards that we used to do some work on my main house then I will use the equity and whatever cash I had down to make a huge down payment on my first rental to make it as risk free as possible I could already afford about a 2k mortgage on top of this one that I have but I don't want to restrict myself cash wise anymore then I have to on my first property
@Becca Summers that 10% investor loan sounds perfect for me going in a four-plex, do you have a contact over there or should I just call them and schedule an appointment?
@Tyler I'll message you.
My 2 cents based on my experience...
I don't see SFR's as a "one door" property. I have two of them that I rent out to single, professional guys. With two homes, I actually have 10 doors. And never any down months. One is in Daybreak, and the other in Orem.
Granted, I lived in both of them as a single guy myself, but I've been married for 2 years now, and have just continued renting them the same way.
Pros - Higher rents than renting to a family, I can pop in anytime to check on the place, if one guy moves out, I don't lose the whole rent, no wear and tear from kids or pets.
Cons - Higher turnover (I usually do month to month which also has higher rent), potential for parties (but I screen very carefully so this has not been an issue at all), parking, roommate drama (rare with professionals).
Just another option to consider.
I'm a mortgage lender myself and I wish we had a 90% product like that MACU loan! I think they only allow you to have 2 going at a time, but for your first rentals, it's a great loan.
Originally posted by @Becca Summers :
@Tyler I'll message you.
Becca could you send me this as well?