SFR vs 4-Plex condo

1 Reply

Hi, I'm wondering what those of you out there would do in my shoes. I'm toying with two different properties to buy, I'll call #1 and #2:

Background of #1:
-$210k 3/2 1,500 sq ft SFR on 6k lot
-In older B- neighborhood (which is also improving) that is lower working class, clean
-convenient access to highways, shopping
-$40 HOA
-Area seems to have lots of older homeowners, no houses are dumps or dead cars, etc
-Rents for $1,150k
-Taxes/Insurance $150 monthly

Background of #2:
-$220k 4-plex of 4 2/2 900 sq ft condos on C- property of 20 other 4-plexes.
-Area has improved from D- a few decades ago but seems unlikely to improve in near future.
-Low-income tenants, Grounds not well kept, units in fair condition and cleanliness outside.
-convenient access to highways, shopping, primary school right across the street
-$700 total for HOA for building, includes water, sewer, community pool
-Units rent for $650 each
-Taxes/insurance total $400 monthly
-Would go with section-8 tenants if possible

My thoughts are: the house is a better appreciation play but CF will be lower. 4-plex will have better CF but unlikely to appreciate due to neighborhood and other units. I can probably only pick up one property right now so there's the opportunity cost if I choose one and not the other.

I appreciate anyone's general thoughts, concerns, or questions!

@Eric Mukai

That all depends on you strategy. I personally always prefer multifamily to SFR. However, there is a lot of details to look at.

Is $700 HOA fee for 4-plex a month? If that's the case than you do not have much bigger income from a 4-plex but you potentially have more maintenance. You'll have 4 bathrooms, 4 kitchen and 4 different tenants. Your #1 will bring roughly $885 a month and #2 $1240.  It's $355 difference. But again since the 4-plex in C- area it may need more of your time and maintenance. Hope this helps 

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