Houston, TX · Member since 2016 · 9 posts · 0 votes
Hi BP, I am fairly new to real estate investing, however I have personally bought several different homes to live in over the past 10 years. My question is: if you had a decent amount of cash to invest (100K-200K), would it be better use of the funds to purchase a MF or several SFR? I know this question is quite general, but I am specifically referring to the Houston market and the projected population growth? All opinions and advice are welcome.
It comes down to your personal goals and a matter of preference. I would recommend learning the basics of both MF and SF and see which one fits better with you and what you are trying to accomplish. I'm in a similar situation, and found that the business of investing in multifamily / apartments is more in line with my strengths, risk tolerance, and short / long term goals. A good beginning book on apartments is ABCs of Real Estate Investing by Ken McElroy. If you like it and want to know more read:
Wheelbarrow Profits by Jake Stenziano & Gino Barbaro Multi-Family Millions by David Lindhal The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges
I also recommend reading them in that order if you decide to go down that route. Good luck on your journey!
I would vote MF hands down. The efficiency that comes with MF vs SF can provide you with much better returns with much less effort on your part. Depending on the size of the MF, you can hire a property manager to take care of the day-to-day management of the property. In general, property managers cost more for SF than MF.
Finally, you're 100% vacant when a tenant moves out of your SF vs. being able to still bring in income when a tenant moves out of your MF... If you've got the capital to get in and the business sense to invest in MF, I would say go straight for the MF investment.
Michael Blank wrote a great blog post on how investing in SF isn't a necessary stepping stone to MF investing...i'd recommending reading through it here: