Multifamily (2-4) or SFR???

Metairie, LA · Member since 2016 · 74 posts · 16 votes

Kinda new to investing. In the Greater New Orleans area. A couple years ago my wife and I bought a 4plex. We took out a heloc after renovating and living in it for a year. Then found out we were having twins and already had 2 kids under 4. So we bought a SFR sight unseen bc it was a steal. We renovated it and will be closing on our refinance on Monday.

I’d like to buy another Multifamily property (2-4 units) but I’m in an area where many people are competing for the same properties and the numbers just aren’t working.

My question is, what are some insights for Multifamily vs SF and what are some insights for maybe things like auction.com and sherif sales???

Thanks for any input!

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Corby GoadeBusiness Member

Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes

Everyone has a different threshold for what is and is not a good investment. What are your expectations for a return? What are your long term goals?

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Corby GoadeBusiness Member
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
6y
Everyone has a different threshold for what is and is not a good investment. What are your expectations for a return? What are your long term goals?
1 Reply
Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@Corby Goade
I’m looking for properties that can cashflow either before or after renovating them some. I’d like to do the BURRRR strategy, but haven’t been able to pay cash for a property just yet to start. I guess that’s why I’m considering SF. After refinancing my SF that we live in currently, I’ll have about 75k cash. It’s not a ton, but it’s the most cash we’ve had before buying our other 2 properties. Long term goal is to have enough properties cash flowing to cover our expenses.
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Braden Smith
Investor · New Orleans, LA · Member since 2012 · 968 posts · 747 votes
6y
Hi @Michael Breedlove. I am both an investor and a licensed realtor in New Orleans. Our market is very tough right now for buyers. Inventory is limited and the demand is high, which equates to some high prices. You are not alone in having a hard time finding properties where the numbers make sense. They are few and far between these days. You will find the same is true with the auctions and sheriff sales... there are just too many people all competing for the same deals.
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Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@Braden Smith nice to meet you bro! I’ve considered venturing out to Slidell or the Covington Mandeville areas but I don’t know much about the Slidell area and NS is in high demand as well.
In your portfolio do you prefer Multifamily or SF?
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Braden Smith
Investor · New Orleans, LA · Member since 2012 · 968 posts · 747 votes
6y
I like multifamily, but I am not opposed to single family. With multifamily you are very unlikely to have all units vacant at the same time, so when you have turnover you still have some rent coming in while you do your make ready and find a new tenant. With single family you have to float the whole note until you find a new tenant.
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Sean Morrison
Attorney · Slidell, LA · Member since 2016 · 322 posts · 179 votes
6y
I think that Slidell is a great cash flow area, just be mindful that flood insurance can put a damper on your cash flow if you forget to figure it in. However, not a lot of smaller multi-families on the Northshore.
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Alecia S.Pro Member
Mandeville, LA · Member since 2018 · 42 posts · 7 votes
6y
I would look at markets surrounding your area. I have started investing out of state to find better deals. I have 5 houses in Louisiana and just bought a duplex in Mississippi for the same reason. There are deals out there, but you may have to look in other markets.
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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y
You will usually get better cash flow with the multi's, or at least it has been the case in every market I've worked in. Most investors assume their single family properties will get better appreciation, but I'm not certain that's always the case. 15+- years ago Baton Rouge was a great cash flow duplex market, but I haven't been back there since. I'm sure it's changed, just like most other places. I've worked with a couple of Louisiana investors that have come here to San Antonio, because of the stiff competition there. If you're used to self managing though, then it might be a wash for you.
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James Martin
Metairie, LA · Member since 2016 · 67 posts · 41 votes
6y
Northshore in the Mandeville area is tough because there is so much nice new stuff coming online. I have a 4 plex over there that I bought in 2016 that I used to get $1000/door. I am now down to $900 -$950 and still have a vacancy every year or so. To compare, I have places on the south shore that are not nearly as nice as my Mandeville 4 plex that are NEVER vacant and pay similar rent.
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Courtney Fricke
Investor · New Orleans, LA · Member since 2017 · 336 posts · 148 votes
6y
@Michael Breedlove Hey Michael, I'm an investor on the Northshore. I run the REIA, actively invest and wholesale on the Northshore. Let me know how I can help!
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Daniel PurcellPro Member
Rental Property Investor · New Orleans, LA · Member since 2018 · 66 posts · 41 votes
6y
@Michael Breedlove
Welcome to BP!
The south shore is tough right now inventory wise. Everything is expensive in regards to being able to cash flow/turn profits.
I have a quad and a double uptown, and a SFH in Metairie. I'm on the MLS, signed up with wholesalers, and am always looking for ideas/deals that could make sense. It's just tough at the moment which is good for the city property taxes I guess haha
Happy to help in any way!
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Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@Sean Morrison great insight. Are there any flood X zones in Slidell?
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Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@Alecia Seastrunk thanks for sharing. Are you using a property manager on the MS property? Was that a Multifamily or SFH?
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Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@Joseph Cacciapaglia thanks for the input. I’ve done a little small bit of research in BR but, from what I’ve read the rental market in BR is not too good bc there’s an oversupply of rentals and not enough demand for renters. Definitely considering our surrounding areas.
1 Reply
Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@James Martin that’s good insight. Thanks for sharing. Yes our 4plex is on the southshore near causeway and Jeff hwy and we’ve been very blessed tenants. I’ve slowly increased rents to get them closer to the market value as well. Have you invested or considered other surrounding areas like the West Bank or Slidell?
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Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@Courtney Fricke nice to meet you! Thanks for commenting. When does the REIA group meet over there?
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Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@Daniel Purcell nice to meet ya. Thanks for commenting. Have you found good success with tenants for your SFH in Metairie? Have you considered other surrounding areas like the Westbank, Slidell, or NorthShore?
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Daniel PurcellPro Member
Rental Property Investor · New Orleans, LA · Member since 2018 · 66 posts · 41 votes
6y
@Michael Breedlove
Yeah we had ok renters before. Currently are listing it as we are moving to multi's as a part of our portfolio before we start digging back into SFH holds.
The rents are the best in old metairie and uptown. West Bank is only a market for flipping for me. Northshore I’m a little late to the party lol
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Alecia S.Pro Member
Mandeville, LA · Member since 2018 · 42 posts · 7 votes
6y
I have 5 SF in Hammond and Covington area. All 3 bedroom 2 baths with fenced yards and garages. I have not had any difficulty renting them out and they have appreciated nicely. However, I just bought a duplex in Gulfport due to a great price compared to my area where I am looking to maximize my monthly cash flow. I have read David Green’s book on long distance investments. We currently have a realtor to do the grunt work of finding and screening tenant applications and then we self manage. Not sure this strategy will work as well with duplex in Gulport, but just closed today so I will keep you posted on it. One unit is already rented out in Gulfport and other we are going to do some minor renovations before renting out.
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Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@Alecia Seastrunk great insight. Thanks for commenting. What were the deciding factors of choosing Gulfport to invest in?
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Alecia S.Pro Member
Mandeville, LA · Member since 2018 · 42 posts · 7 votes
6y
Deciding factors: market in Gulfport is still affordable and suppose to appreciate in next couple of years. Also getting more cash flow from this duplex and a cheaper price than in Hammond Mandeville area. Rents are definitely lower in Gulfport but you can maximize cash flow with cheaper prices.
1 Reply
Kent Ritter
Investor · Indianapolis, IN · Member since 2019 · 62 posts · 64 votes
6y
@Michael Breedlove it's the same amount of transaction work to buy a 4 Plex as a SFR. Also you get better economies of scale all around especially if you renovate each unit with the same package. Finally, you have the tenant security you can lose a tenant and still cover your mortgage vs. being stuck with it on the SFR.
More bang for your buck!
Honestly, I would suggest you go as big as you can.
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Michael Breedlove
OP
Metairie, LA · Member since 2016 · 74 posts · 16 votes
6y
@Kent Ritter thanks for the insight. Yes, I have certainly enjoyed the perks of owning a 4plex. We got a great deal on it....slowly increased rents for the units to get them at or closer to market value....and was able to pull out equity....now the rents cover both mortgages on the 4plex and our primary residence. We’ve had minimum vacancies so far but having multiple units definitely has been a perk. If I could find another diamond in the rough like the one I have...I’d jump on it. The New Orleans market is pretty overpriced now.
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Account Closed
Rental Property Investor · CA · Member since 2019 · 84 posts · 50 votes
6y
It all depends on the particular deal. I've seen some great SFR deals and crappy MF ones. Run the numbers, check out a few podcasts and just stay active!
1 Reply
Heath Jones
Rental Property Investor · Enterprise, AL · Member since 2019 · 137 posts · 85 votes
6y
@Michael Breedlove I have to say I'm partial to Multifamily (our first two investment properties where both MF), because you can still cover the mortgage if you have a vacancy. Although we did recently purchased some SFRs. It all comes down to what your REI goals are. Mine goal is to increase monthly cashflow as quickly as possible.
I’m of the mindset that the more doors you have, the bigger your monthly income stream is. I hope this helps, and if you decide on MF... you have to be on it, fast and competitive. Also, go 4 or more!!! Rock on!
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