Single family to multi, convince me

[Alan G.]

I have heard numerous times from multi family investors that if they had it to do over, they would have skipped the singles all together.

However, I just don’t see the returns in multi. I currently own just under 60 properties, all singles, all very close in proximity to each other and purchase approx 1 per month. All “c” neighborhoods. Have a great system in place for renovations since most of what I buy is distressed.

Making an avg of 500 per door after everything including debt service and my COC after financing is usually around 50 percent and need no outside investors.

I just can't get those returns on multi. I totally understand buying multi and raising NOI to increase value but I'm not looking to sell in 5 years so cash flow is really the only thing important to me.

Am I missing something? Given these returns, would you still do multi?

[Alan G.]

@Eric C.

Eric,

Yes these are actual numbers after all expenses not just estimates. I have all 3 and 4 bedroom properties and have very little turnover and since everything we buy we fully renovate our maintenance is relatively low. That being said, as the properties start to age I’m sure that number will go up.