Multi family or commercial property?

5 Replies

I have been in the single family rental market for 6 years, it's a love hate relationship. I have 4 rental properties,  1 is in escrow closing set for 11/10/17, the other going on the market priced to sell fast. I recently learned to avoid capitol gains i can use the 1031 exchange. I also learned I have to buy equal or greater. That being said I need a property around 500k

Questions

1) which would be a better investment,  multi family or commercial I am EXTREMELY handy and do nearly all improvement myself. 

2) what websites feature multi family / commercial property for investors?

I appreciate all opinions and help offered.

Note that "multifamily" can include both residential (4 or less units) and commercial (5+ units) multifamily properties. 

You can find these in most MLS sytems under "Income" properties, or under "Multifamily" (residential or commercial, depending on the number of units).

Loopnet is another useful resource. 

@Joan Brazie You probably want to hammered out what is the love vs. hate in your SFR portfolio. And specify if you’re looking for commercial (like buying the Taco Bell building with a triple-net lease) or a 5+ unit commerical multifamily building. Either way, you should be talking to banks about your commercial loan thoughts and learn their requirements and terms. Anyway, you can find commercial properties on LoopNet (mixed bag), through local commercial brokers, and occasionally on the MLS.

@Joan Brazie , and to complicate your decision a little more - You don't have to only replace your old property 1 for 1 in a 1031 exchange.  In order to defer all tax you do have to purchase at least as much as you sell but you could buy multiple properties using the proceeds in whatever allocation you choose.

We focus on larger apartment buildings and have no intention of going anyplace else.  It works very well, as long as you buy right of course.

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