Investor · San Antonio, TX · Member since 2012 · 596 posts · 587 votes
6y
I'd definitely suggest a small multi-family (2 - 4 units) for several reasons.
1) Can be purchased with a conforming loan
2) Ability to house hack (if desired)
3) Vacancies don't decimate cash flow
4) Potential net cash flow higher than that of SFR
Some important things to think about. San Antonio does not have a large housing stock of true 2 - 4 unit buildings. Many are large single-family to multi-family conversions. An even greater amount are un-permitted multi-unit buildings that are comprised of series of shoddy additions. You'll want to make sure that each unit has an electric meter. Typically water won't be individually metered on these types of properties (too costly due to impact fees).
You will also want to make sure that the property is zoned properly. Even if the house was built 100 years ago as a duplex, if it's currently zoned single-family (R-4, R-5, R-6, etc.) you have a non-conforming use and may have issues with lender underwriting, as well as the city citing you for the non-conforming use. You can work with the City to get approval for a non-conforming use without going through the re-zone or variance processes, but there is no guarantee they'll approve it. Unfortunately, we've seen a bunch of wholesalers and noob agents, pushing for a sale, fail to mention (or understand) the issues of improper zoning.
Good luck with your search. Holler if you have any questions.
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
6y
@Rusty Shafer
That’s a vague question. What’s your goals? Capital wise what do you have to invest? What areas are you located? Small multi family is a great start to your portfolio.
Rental Property Investor · San Antonio, TX · Member since 2019 · 69 posts · 12 votes
6y
@Rusty Shafer If you use the same flip strategy on a 3-4 unit multi family home, you’ll be in amazing shape, with plenty of cash flow no matter what you choose.
Investor · San Antonio, TX · Member since 2012 · 596 posts · 587 votes
6y
I'd definitely suggest a small multi-family (2 - 4 units) for several reasons.
1) Can be purchased with a conforming loan
2) Ability to house hack (if desired)
3) Vacancies don't decimate cash flow
4) Potential net cash flow higher than that of SFR
Some important things to think about. San Antonio does not have a large housing stock of true 2 - 4 unit buildings. Many are large single-family to multi-family conversions. An even greater amount are un-permitted multi-unit buildings that are comprised of series of shoddy additions. You'll want to make sure that each unit has an electric meter. Typically water won't be individually metered on these types of properties (too costly due to impact fees).
You will also want to make sure that the property is zoned properly. Even if the house was built 100 years ago as a duplex, if it's currently zoned single-family (R-4, R-5, R-6, etc.) you have a non-conforming use and may have issues with lender underwriting, as well as the city citing you for the non-conforming use. You can work with the City to get approval for a non-conforming use without going through the re-zone or variance processes, but there is no guarantee they'll approve it. Unfortunately, we've seen a bunch of wholesalers and noob agents, pushing for a sale, fail to mention (or understand) the issues of improper zoning.
Good luck with your search. Holler if you have any questions.