Triplexes or Fourplexes

6 Replies

Hey everyone,

I’m fairly new to real estate investing and I’m currently saving money for my first rental property investment. I want it to be either a triplex or a fourplex. 

Initially when I began educating myself, I wanted to begin with a duplex (easier to begin with for self property managing) but now I want to make the first deal a great one so I can get out of the rat race as fast as I can. 

So,  my questions are: what should I keep in mind while analyzing deals for triplexes and fourplexes that is different than duplexes? I figure obviously more units so more expenses for tenants moving out/moving in. Also, my market (Milwaukee/Waukesha, Wisconsin) seems to have very few triplexes and fourplexes, unless I’m just not using the right resources to locate them. What resources (real estate agent, Zillow, etc.) or other means would you use to locate triplexes and fourplexes? 

Thanks in advance everyone!

Hi Chris - I'm in the same stage and area as you. If you are wanting to find properties on your own, I've found that Shorewest Realtors website (shorewest.com) is pretty helpful. You can search the MLS for multifamily properties. I've been using it and have found plenty of properties that I haven't seen on Zillow, Trulia, etc. Good luck!

A little insight @Brandon Williams , Shorewest pulls data from the MLS's IDX feature, the most up to date data for non Realtors is Realtor.com.

3&4 units tend to be in high demand for the casual investor, the debt level is not terrifying, and most owner own maybe 1 or 2 properties, as a diversification play in their retirement strategy, this makes them highly desirable, and pushes the price up. They are great properties, and i would love to have a dozen or more of them, but the prices per door tend to push me away. good luck

Brandon and Chris, I totally agree with Scott on the tri- and fourplexes. In addition, most of that housing stock has been build as affordable housing in mostly 2 and 1 bedroom configurations. As a general rule of thumb you can say that the fewer bedrooms you have, the more turn over. More bedrooms and more storage space generally produces longer leases and fewer turn overs - and those are actually your single biggest expense in the long run. The fact that a lot of small time landlords own the majority of the stock is a problem and an opportunity at the same time - everyone wants to buy one (which drives prices up) and there are some sellers that don't know what they are doing. You may want to consider 2 families, especially larger units with 3 bedrooms and more than one bath. 

My advise is not to worry as much about the type of property (whether it is a SFR, Duplex, Triplex, fourplex) and to just make sure the numbers make sense on the deal. As previously discussed, many of these properties are overpriced due to demand exceeding the supply which has led to them being a poor investment for new investors-Especially ones not able to appropriately evaluate a deal.

Good luck!

You can get a list of every duplex, triplex, and 4 plex in your area from list brokers.  Just google that term with real estate.  That list will include the mailing address of all of the owners.  I would do a direct mail campaign to each of them.  You will find some burned out landlords, some divorces, some inherited property in any list that you pull   

My parents lived in Waukesha, I haven't been there in years but it is a nice town that should have some off market inventory for you.

I am also in the same boat as you and I also live in Wisconsin. Most duplex's are overpriced in my area and 4 plex's are also hard to find. I have called on a few 4 plex's in my area no luck yet but I will continue to look. I really like the idea of buying a single family with the BRRR strategy as well.