Money for One Deal, Duplex or Single Family?

Question

Hello,

I have money for one deal but can’t decide what is better, a duplex/triplex out of state (Maine probably) or rent my current primary residence, upgrade, rinse and repeat.

Any help is appreciated!

- Brad

Denis Ponder · Answer

Can you get both at the same time? Rent your primary, move to a MF and house hack, rinse, repeat?

Bradley Mair · Answer

Thanks Samuel. There’s so many good strategies it’s hard y to pick one, but these two seem best for me.

Travis Biziorek · Answer

Hey Bradley, what kind of market is this in? If it's C Class is it common for properties to get broken into and have furnaces and water heaters stolen?

That will play into the pros/cons of duplex vs SFH. I could talk about this for 10 minutes straight and it's a pretty personal decision with positives and negatives to each.

Garret Getch · Answer

Hi Brad!

If you can afford it, I would recommend a Triplex or even a 4 unit; because you are mitigating your risk and likely increasing your cash flow. By having more tenants there are more eyes to watch for issues that may pop up, more people paying rent, and if you have one of the units vacant for a bit, it will not hurt the bank as bad as it would if you only have two tenants in the building and one of them left.
If you are planning on investing in Maine, make sure you work with one of us realtors that understands investing and knows the local market so we can advise you properly. It may look like a cheap 3-4 unit, but if it is in a place that is known for high turnover or other issues, then it may not be worth it. Having the right team locally should be very important to out of state investors.

Samuel Diouf · Answer

Your second strategy is similar to house-hacking and is a great strategy if you want to be less hands on.

If you want to go the OOS multifamily route, it will require a little more work, but you can scale pretty quick when investing in the right markets.

Patrick McCann · Answer

Why would you choose Maine? Not that it’s a bad choice but what’s your reason for choosing there. If you’re not using a primary residence loan then I’d go for the triple because it would likely cash flow better than a duplex

Greg Scott · Answer

Generally plexes are better if you are focused on obtaining cashflow. The problem is that in many areas it is hard to find comps. Because of this, they tend not to appreciate as much and are a little harder to sell.

So, if you are looking for growth, I would focus on SF. If you are focused on cashflow, then plexes.

Money for One Deal, Duplex or Single Family?

Money for One Deal, Duplex or Single Family?

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