I had a meeting with my lender at 8 this morning - I have a great relationship with a branch manager of a local, regional bank - and one goal was to get me a face-to-face meeting with the head of their commercial lending department. It was a great "get to know you" session for the commercial guy and I, and I think he was pleasantly surprised with my grasp of the basics, the deals I've found so far, and our goals looking forward. At one point he asked me if I was interested in the 'larger' multifamily properties, and I told him the truth: Right now, in my area, I'm really not. This was the example I used to show him why (among other reasons, of course):

I'm closing on a deal a week from today: it's a quad, built in 1989, great tenant history, good location, good opportunity to add some value when the long term tenants go. Once it's stabilized, gross monthly rents will be $2600. Purchase price is $96,000. (And I got 13.5 acres of additional land, separate from this property's lot, along with this deal for $1000.)

Note: this isn't a warzone, or other horrible area. I own a SFR about a minute away that my wife and I used to live in, and we now live about 5 minutes away. We're currently looking at a Triplex with similar numbers to this property (to prove this isn't an aberration.)

Meanwhile, on LoopNet, about 3 minutes from this property is a 16 unit complex - 2 buildings. Built around 2000, it's all 2 bedroom units. Definitely some deferred maintenance, similar location, similar pretty much everything to the quad we're closing on. 

NOI is given to be $67,860. Cap Rate given is 7.52% (which I think is about right for around here) which makes the asking price: $900,000.

But why on God's Green Earth would I want to spend $900,000 on a 16 unit, 2 building complex, when I can likely buy 16 units split between 4 buildings locally for less than $400,000? I guess I'm just not seeing what the extra half a million dollars gets me here? 

This is pretty much why I'm not at all interested in commercial multi-family in my area. I'm still relatively new, so I almost feel like there must be something HUGE I'm missing here: can someone please point out what that might be, gently? 

Thanks!