Buy and hold which style do you prefer ?

Question

I am currently interested in only buy and hold properties, and tend to lean away from single family homes. Looking for opinons on Multi Family compared to Single Family. Thoughts?

Frank Wong · Answer

I started with multi-family and now I only invest in SFRs for all the reasons Joe mentioned.   To me scaling to 50+ units is not my goal.  I like owning the houses and I like having a larger pool of buyers for my exit.

Quito Keutla · Answer

@Clark Michael There's really no right or wrong like @Frank Wong mention it just depends on your goal and where you want to start.  I started out with SF and moved to MF.  Happy Investing!

Frank Wong · Answer

Hi Clark,

There wasn't anything I didn't like.  It was the perfect investment for me when I bought it.  I had 4 units to spread out my risk and I still own the building today.  My investment philosophy and goals have changed.  I prefer to own houses, I like having a niche.  Apartments are being built everywhere and for some people renting an apartment gets old and want a house.  That is where my properties come in.

There is no right or wrong here.  You can go both ways.  I just prefer houses and I like the edge that it creates for me.

Mark Burlison · Answer

Tenant moves out of SFH....unable to find suitable renter for 2-3 months....do you have the funds to keep it afloat? Multi unit...you will always be able to cover at least your payment! That was the advice I got from the friends I knew who were long time landlords. Good luck! P.S. love my multi unit so far!

Jeff Schechter · Answer

As a TK provider, we operate in C class areas in Indy.  We've all but gotten away from multi's.  The stability and ease of tenants has everything to do with that decision.  There's a BIG difference between a family renting a SFH for $750, vs a tenant that "just wants something cheap" in the $500-575 rent range.  Nearly all good renters in this price range would rather have their OWN place than shared walls.  Unless you move up to bigger multi's, you don't really have any amenities (gym, on site mgmt, etc) to lure better tenants.

Seth Ferguson · Answer

@Clark Michael

I started off with single family homes and duplexes but quickly realized that I couldn't scale as quickly. The larger multifamily deals allow you to bring in other investors, which in turn, allows you to scale faster. However, you're working with other people's money and need to be extremely solid with your set up, deal criteria, and the operation of the property.

Clark Michael · Answer

@Mark Burlison I agree with you all the way. That is how I think and have always stayed away. Many people love single family over multi and make a great profit. It is all about what you enjoy the most.

Clark Michael · Answer

@Seth Ferguson I started with small multi family and I am looking for any type of multi family I can find and make work. Personally I like multi family much more and tend to stay away from SFH.

Mainly just looking to see what people prefer and why they do.

Matthew McNeil · Answer

I'm in @Joe Splitrock and @Frank Wong's camp.  I only invest in SFH for the same reasons they've stated.  Never regretted it (10+ years) and will continue to grow my portfolio only with SFHs.

Jerrad Shepherd · Answer

@Mark Burlison

I hear this argument all the time, I have dozens of sfh and when one is empty the others carry it just as a multi family would.  Also the exit strategy is a lot easier with houses.  The problem I am running into is scaleability, although most people do not wish to grow their portfolio to the size that it would ever hurt them.  In my area the roi is a good 4-6% better on houses versus multi family.  Most of the big money doesn’t want to mess with houses.  I am fine with buying the scraps for a better return.

Buy and hold which style do you prefer ?

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