Newbie - Single Family lot vs Multifamily lot

Buying & Selling Real Estate
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Newbie - Single Family lot vs Multifamily lot

Laura Ayala
Edinburg, TX · Member since 2017 · 3 posts · 0 votes

Hi there!

I am new to investing, and wanted to get some feedback on what someone with more experience would do in this situation, as this is all new to me, and I seem to be in "analysis paralysis."

There is a multifamily lot for sale in my area for $65,000, and a single family lot closer to the city for $47,000. I don't make a lot of money, so I can't afford a large loan (no more than $80,000). I'm not sure whether to buy the multifamily lot to later re-sell, buy the multifamily lot to later build 4-plexes on the lot (but it would be at a much, much, much later time), or just buy the single family lot and build a rental?

Ideally, I'd like to build the 4-plexes in order to live in one and rent the other 3., but as someone with zero experience, would the single family lot be my best bet? Or would it make more sense to buy the multifamily and re-sell for a profit and use those profits to buy my first rental?

Any help is appreciated!

Thank you,

Laura

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Tom Ott
Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
8y
Originally posted by @Laura Ayala:

Hi there!

I am new to investing, and wanted to get some feedback on what someone with more experience would do in this situation, as this is all new to me, and I seem to be in "analysis paralysis."

There is a multifamily lot for sale in my area for $65,000, and a single family lot closer to the city for $47,000. I don't make a lot of money, so I can't afford a large loan (no more than $80,000). I'm not sure whether to buy the multifamily lot to later re-sell, buy the multifamily lot to later build 4-plexes on the lot (but it would be at a much, much, much later time), or just buy the single family lot and build a rental?

Ideally, I'd like to build the 4-plexes in order to live in one and rent the other 3., but as someone with zero experience, would the single family lot be my best bet? Or would it make more sense to buy the multifamily and re-sell for a profit and use those profits to buy my first rental?

Any help is appreciated!

Thank you,

Laura

 Be careful of the allure of MFRs. It all comes down to the numbers. MFRS have more costs that people forget about. You, as the owner, have to pay for grass cutting, snow removal (if you have any), many times there is only one water meter and you need to pay for the overages. Also, tenants treat MFRs more like an apartment than a home so you will often have a reoccurring vacancy.

In SFRs, tenants have to pay for all of these items and they feel more at home and are likely to stay longer.

Try looking at: Single Family vs. Multi-Family Investments

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  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    8y
    Originally posted by @Laura Ayala:

    Hi there!

    I am new to investing, and wanted to get some feedback on what someone with more experience would do in this situation, as this is all new to me, and I seem to be in "analysis paralysis."

    There is a multifamily lot for sale in my area for $65,000, and a single family lot closer to the city for $47,000. I don't make a lot of money, so I can't afford a large loan (no more than $80,000). I'm not sure whether to buy the multifamily lot to later re-sell, buy the multifamily lot to later build 4-plexes on the lot (but it would be at a much, much, much later time), or just buy the single family lot and build a rental?

    Ideally, I'd like to build the 4-plexes in order to live in one and rent the other 3., but as someone with zero experience, would the single family lot be my best bet? Or would it make more sense to buy the multifamily and re-sell for a profit and use those profits to buy my first rental?

    Any help is appreciated!

    Thank you,

    Laura

     Be careful of the allure of MFRs. It all comes down to the numbers. MFRS have more costs that people forget about. You, as the owner, have to pay for grass cutting, snow removal (if you have any), many times there is only one water meter and you need to pay for the overages. Also, tenants treat MFRs more like an apartment than a home so you will often have a reoccurring vacancy.

    In SFRs, tenants have to pay for all of these items and they feel more at home and are likely to stay longer.

    Try looking at: Single Family vs. Multi-Family Investments

    1Reply
  • Michael Lee
    Investor · Coppell, TX · Member since 2008 · 2k+ posts · 646 votes
    8y

    Hello Tom!  I think what you said was good and not as salesperson sounding like they use to.  Thanks!

    0Reply
  • Michael Lee
    Investor · Coppell, TX · Member since 2008 · 2k+ posts · 646 votes
    8y

    Hello Laura! I think that apartment buying is better than the single family deal because it is very risky. I have been studying about real estate investment full time for about 3 years because of my physical condition where I cannot walk or work right now. I was in construction and was a real estate broker for about 30 years for each so I tend to know what I am saying about real estate. The experience saying you need to have experience before doing apartments is a myth. Multiunit places are usually a better than an average way to go. You know what you know and do not always buy into what is said to you, it might just be about sales. Do not do anything with your emotion but treat it more like a business decision. I think what Tom said is useful. Tenants are usually more conservative with the utilities when they have to pay. I would tend to put heavier weight on MF rentals than a SFH lot, building a SFH is riskier than apartments mainly and it typically would increase your income. I hope some of this helps. Good luck to you!

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  • Laura Ayala
    OP
    Edinburg, TX · Member since 2017 · 3 posts · 0 votes
    8y

    Thank you! I appreciate your responses and well wishes

    0Reply
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