debating investing in Residential mf/apartment VS commercial

debating investing in Residential mf/apartment VS commercial

CA · Member since 2014 · 244 posts · 47 votes

Debating which route is better in terms of

- passive income

- less maintenance and landlord involvement

- low risk of Tennant stop paying rent/evacuation etc

- long term rental with fixed increase

- low vacancy (obviously location depending)

- ROI and property appreciation

would you give with -

residents - multiple sfr, mf - apartments duplex - 4plex

or

Commercial buildings? and rent to shops/stores etc

suggestions?

location - SF bay area but open to anywhere in California or booming states.

-

under 2M

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Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 801 votes
4y

commercial is more passive.  You can find deals all day long under 2million with or without tenant.  Multifamily is more work but can have more upside.  It just depends if you are going to be a value add investor or a cash flow/passive investor.

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  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    4y

    Under $2m for industrial, office, retail is going to be very labor intensive. You'll get slaughtered on your time on retail tenants in a Class C center. You could consider a STNL, but under $2m is a lot of cash buyers and very competitive space.

    I'd pick up as many multi units as you can, value add or not, just let that grow over time.

  • Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 801 votes
    4y

    commercial is more passive.  You can find deals all day long under 2million with or without tenant.  Multifamily is more work but can have more upside.  It just depends if you are going to be a value add investor or a cash flow/passive investor.

  • CA · Member since 2014 · 244 posts · 47 votes
    4y

    @John Mckee

    commercial interests rate is little higher as compared to residential. .. unless I am missing any creative way to handle it.

    do you have any suggestions on how to find good commercial deals, prefer California but open for other states too. mostly I check loopnet only

  • Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 801 votes
    4y

    It depends on what your looking for, but I can tell you that I pass on good commercial deals everyday with my network of brokers.  Feel free to PM me.

  • Investor · Chicago · Member since 2022 · 128 posts · 85 votes
    4y

    It is easier to get lenders in on a multifamily. 

    banks are more willing to lend, and will require a lower DCR

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