SMALL MULTIFAMILY OR SINGLE FAMILY?

11 Replies

Hello everyone!!

I’m in need of some advice from experienced multi family investors. I’m selling my personal residence and should be keeping about $90,000 after paying off my mortgage. I’m looking to invest this money the soonest possible, and I have about another 90,000 in savings. I have only bought SF in the past. I’m looking to get into multi family investing. What do you guys recommend, should I look for a two unit? Four unit the needs work? The market I’m looking to invest is Detroit. Thanks in advance.

Hey @Maria Luna ,

I think Multi-family is the way to go. You'll keep all expenses under 1 roof, a vacancy will NOT completely wipe out your rental income and you'll gain experience as a landlord (assuming you purchase locally and self-manage). This, of course, depends heavily on your end goal. If you're looking for passive income, financial freedom, etc, multi-family investing will get you there faster.

That being said, a local realtor should be able to point you in the right direction. If you're looking to invest out of state (i.e. Detroit) I would contact others who have invested in that market from out of town. This way you can learn from their experience and possibly use their  acquisition team (realtor, lender, attorney, contractor, engineer/home inspector, etc).

Best of luck to you on your journey!

Abel

@Abel Curiel

I’m actually moving to Detroit in two months, and i do want to manage my properties. My goal is volume for cash flow, so I feel like I can accomplish this faster with multi family. I appreciate the advice.

Originally posted by @Maria Luna :

Hello everyone!!

I’m in need of some advice from experienced multi family investors. I’m selling my personal residence and should be keeping about $90,000 after paying off my mortgage. I’m looking to invest this money the soonest possible, and I have about another 90,000 in savings. I have only bought SF in the past. I’m looking to get into multi family investing. What do you guys recommend, should I look for a two unit? Four unit the needs work? The market I’m looking to invest is Detroit. Thanks in advance.

Hi @Maria Luna

May I kindly suggest that you may wish to consider sticking with Single-family Investing rather than Multi family (especially in Detroit).

On paper Yields would be high on MFRs - agreed.

But one bad tenant (say a dealer) will get all the units empty in a short while. Tenants will drop off quickly.

Secondly, your exit criteria will always be harder.

You can only sell to another investor. And investors seek Yields. Meaning Lowest Sale price to you.

Unlike SFRs you can sell to a Home Buyer and there is an Emotional value attached.

I convert all my Duplex to Single Family homes.

My most recent project was this two family Flat (Two 4 bed 1 bath Units).

Which I have converted to a 9 Bed 2 bath (converted the upstairs kitchen to another Bedroom).

We are running this as a Department of corrections Boarding Home.