Buy three 4-Unit residential apartment buildings?

1 Reply

I'm not seeing any commercial MF that cash flows worth a damn and has any good resale prospects. The CF I'm seeing is 12K a year after you subtract debt service from the NOI. I'm looking at 20+ unit buildings.

I make almost three times that from a handful of single family homes, plus the appreciation to boot, and another 30+K in mortgage pay down. Plus I can sell any of my SFH with no real repairs. These MFH generally seem to need work. To top it off, at their cap rates, I'm not sure I'll make any profit when I sell. It's unlikely their cap rates will go low enough to create a ton of value, no matter the increased NOI. Hard to believe 1% cap rates in the next five years....

So, I'm considering buying three, 4-Unit apartment buildings instead. They should each cash flow about 1K a month after expenses. Plus they should still have somewhat easier resale than a big apartment complex, though admittedly less easy to sell than a house. Plus I could move into one of the units and retire any time, albeit sacrificing some quality of life....

Apartments are really overpriced these days.  I doubt that properties in the overall Seattle market really cash flow well.  Probably more of an appreciation market.

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