Trinity, FL · Member since 2016 · 209 posts · 57 votes
I was curious what everyone's opinion on 2/1 vs 1/1 units. I have been keeping my eyes out for a MF investment, but there is less than 8 on the market within 25 miles of me fo sale under 300k. I currently cant finance above the 300k mark as of now. Most of the ones on the market are all 1/1 units and i feel like they are very over priced, because when i run the numbers im getting like $70-90/ door profit each month.
Investor · Avilla, IN · Member since 2013 · 796 posts · 769 votes
9y
@William Huston I own 61 units and have quite a few of both. I probably prefer one beds over twos for the fact that they are smaller and cheaper to turnover on average when needed. More turnover is to be expected but not always the case with one beds. That said, turnover is constant when you have a bunch of units regardless of mix.
Now to the matter of why I actually took time to respond. "Can't" and "finance" should never been said in the same sentence by a real estate investor. Instead ask "How can I finance?"
I purchased a nice, well-maintained and stable 16 unit 5 months ago from a seller who had owned it for 30+ years on seller financing, with $1000 down, but I got over $14k in CASH at closing and no payments for 6 months. This was a guy looking to retire and wanted to maximize the sale for tax purposes. The deals are out there. I've bought almost everything I own on land contract with nothing down or a small down payment. I own my deals 100%....not with partners.
Baltimore, MD · Member since 2015 · 29 posts · 14 votes
9y
What are the comparable rents for 1/1 vs. 2/1 units in your area? We get between 100-200 more per month for the extra bedroom, but offer various discounts depending on what the market is demanding at the moment.
What are your demographics? Singles? Families? Roommates?
Tucson, AZ · Member since 2014 · 134 posts · 43 votes
9y
Usually 2/1 are preferable adds up to higher rents and more stable tenants.But your area may be different single retirees or retirees in general on fixed budgets near amenities hospitals shopping etc.
Investor · Avilla, IN · Member since 2013 · 796 posts · 769 votes
9y
@William Huston I own 61 units and have quite a few of both. I probably prefer one beds over twos for the fact that they are smaller and cheaper to turnover on average when needed. More turnover is to be expected but not always the case with one beds. That said, turnover is constant when you have a bunch of units regardless of mix.
Now to the matter of why I actually took time to respond. "Can't" and "finance" should never been said in the same sentence by a real estate investor. Instead ask "How can I finance?"
I purchased a nice, well-maintained and stable 16 unit 5 months ago from a seller who had owned it for 30+ years on seller financing, with $1000 down, but I got over $14k in CASH at closing and no payments for 6 months. This was a guy looking to retire and wanted to maximize the sale for tax purposes. The deals are out there. I've bought almost everything I own on land contract with nothing down or a small down payment. I own my deals 100%....not with partners.
Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
9y
We're in a college town and 1/1's consistently rent the same day as posted. $100-200/mo makes a huge difference for people on limited or fixed budgets like students or, as @Brandon Hicks mentioned, retirees.
Talk to local property managers and find out where the greatest demand is vs supply.
Also, in our market, the marginal cost of bigger units is small so all new construction is at least 2 br. This means that there are no small units coming online. As a percentage of the housing stock 1 br units are becoming more scarce.
"The key to unit mix is to acquire an asset that has a favorable number of two-bedroom units in relation to one-bedroom units. The ideal ratio is 2 two-bedroom units to 1 one-bedroom unit.
For example, on a 100-unit property, we like to see 66 two-bedrooms and 34 one-bedrooms.
This type of unit mix makes the asset more valuable, and will make it easier for the landlord to rent out the units as well as choose from a larger tenant base. Tenants also have the option of moving up or down a size without having to leave the property, which also benefits the landlord in that it reduces vacancies. We wouldn't discount a property solely on the tenant mix. It's only one piece of the puzzle, but a rather important one."