Who would live in a fourplex ?

Investor · Colorado Springs , CO · Member since 2013 · 77 posts · 22 votes

10y

I would. Ensure you recruit great tenants because they are your neighbors. Take ownership and I prove the property by adding value. Live for free! It's a no brainier. Now, if you have a family, it will get complicated.

1 Reply

Jeff S.

OP

Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes

10y

No family, so that's not an issue.

I'm just trying to understand the mentality. Fourplexes around here are (almost always) just drab boxes without parking or decent paving or updated interiors. If I had $7-800/mo to spend on a rental, why not rent in an apartment complex or a condo?

Or, if I'm a fourplex owner, is it worth the extra effort to update the kitchen a little, take better care of the landscaping, etc. or is that just going to drive away the "typical" fourplex renter?

0 Reply

Michael Boyer

Investor · Juneau, AK · Member since 2015 · 980 posts · 741 votes

10y

it is not an uncommon observation, Jeff... It can be mattress mayhem, but sometimes it is just the working class, joe six pack crowd that may not fit the high end apt demographic; they may be the change your own oil(or transmission) in the parking lot crowd, or need a backyard for dog or pit bbq..etc... But those ugly ducklings quads are probably some landlords swan in terms of cash flow... They may even get better returns than, say, a highly leveraged high end apartment entity owner... Sometimes the ugly stuff makes more than the pretty stuff...and bear in mind you don't have to live there forever, maybe a try a couple of years, and incrementally update all the units and exterior...best of luck

1 Reply

Mark Graham II

Williston, ND · Member since 2015 · 63 posts · 17 votes

10y

I would say that the advantage would be for people like me. This is how I always felt about it: I would much prefer a single family home to rent, but if that wasn't an option due to price, then I would prefer a smaller multifamily. Simply because in my mind I would have more windows, be able to walk directly outside (without needing an elevator or long hallway to the main door), and could feel like I come and go as I please. Personally I don't understand those who live in the large apartment buildings. Too many people, and too many opportunities for noise. If I could be in a place, and know the folks on both sides of me, I feel like I would be more inclined to befriend them, rather than worry about them.

Thats not to say I wouldn't love to own a large complex in the future, but thats just my .02 about how I see things. Also, I'm more or less a neat freak, and can't stand trash outside, or run down looking places. If you offered me a unit in a duplex, triplex, or fourplex that was even just cleaned up, good curb appeal, and the inside looked like you cared about it, I would be all over it! Things have changed in my life now, and I no longer look for those kinds of things, as the wife and I have a house, but I thought it might help you a bit

2 Reply

Jeff S.

OP

Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes

10y

Okay Michael,

That is what I'm suspecting. I'm not all that uppitty myself - I've spilt many a quart in my day. And I think here in Colorado there's a certain Western mentality of independence that chafes at "rules n' s*#t". I'm just trying to balance this with a lot of the advice here on BP about tenant screening, strict accountability, etc. Like, do you evict for a car up on blocks? A little too much noise on a Friday? A butt-load of junk on the balcony?

I guess there's a certain "fourplex bargain" that comes into play. Anybody else have insights on this to share?

1 Reply

Jeff S.

OP

Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes

10y

Thanks Mark (sirry the @ doesn't work on my phone).

I feel like a duplex hits a sweet spot where you get a lot of space and privacy compared to a complex, especially if it's mixed in a SFH area. So far, the 4plexes I've looked at are kind of crammed together into "plex ghettoes", that might have a tiny bit more elbow room than a complex but less curb appeal.

So where is value to be found: increasing curb appeal or "elbow room" ?

1 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@Mark Graham II I think those are great observations... I think the 4 plex depending on the parking and if they have a garage or not... but basically larger apartments the management is much stricter. 4 plex not so much.. the few I have had and the one's I brokered were all rented by more tradesmen type blue color workers or a lot of kiddlees

were as apartments tend to have more of your single folks single women. etc for the safety aspect and or those that want the amenities..

but you can buy a 4 plex move in and chose your neighbors.. little known nugget is that is you owner occ. a 4 plex you can discriminate to your hearts content.. you want only older folks No problem.. you want only college coeds no problem any one you choose.

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1 Reply

Mark Graham II

Williston, ND · Member since 2015 · 63 posts · 17 votes

10y

Totally forgot to mention that as well, I would never consider living somewhere I didn't have a garage. I'm an avid motorcycle rider, so I would want my bikes protected

2 Reply

Jeff S.

OP

Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes

10y

Thanks, Jay.

Given the way things are tending, I kind of relish the idea of being able to say: "Why yes, I AM discriminating against you. I refuse to accept your application because you are a Scorpio, and your father in law is left handed. NEXT!"

1 Reply

Jeff S.

OP

Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes

10y

Also, I agree that the vibe I have seen is not at all "rough" in the sense of dangerous, just rough in the sense of not caring too much about appearances. And for some reason it seems particularly true about the driveways & parking. Some driveways I don't know if I could handle in a 2wd.

0 Reply

Travis Sperr

Lender · Denver, CO · Member since 2009 · 1k+ posts · 597 votes

10y

Multiunit isn't for everyone, but it is great way to jump in to owning rental property for little money down. My first deal was a triplex I lived in and rented the other units. My best cash flowing property to this day with only 3.5% down in 2010, has doubled in value to $400k.

Your comments are showing you have pretty well grouped all fourex renters into the same box. Like with all tenants there is the good, the bad and the ugly. It is your job to sort through for the best results.

My tenants take pride in the property in an area that people do park in the yard. A lot of times they don't have the credit or ID's needed to rent an apartment. They like to have their own space without neighbors on all six sides, a small yard (even if shared).

Tenants argue, complain about each other, park in the wrong places. This is all a part of the business. You don't simply evict for the things you mentioned, too loud, cars on blocks, etc. you provide a notice to correct and take the process in the lease.

Be firm but fair and do not expect what you don't inspect.

2 Reply

Paul MacInnis

Investor · Windsor, Nova Scotia · Member since 2015 · 128 posts · 34 votes

10y

Hey Jeff, I live nowhere close to you - east coast of Canada - but I do own a 4-plea - and you certainly describe it well! When I bought it over 10 years ago it was quite rough. Over time I've fixed it up and even put in a few high-end finishes that I got on 90% clearance day at Home Depot.....and it's paid off. The tenants are still 'less-concerned' about appearance but they're good people, pay the rent, and pay more than some of the local larger complexes! Good luck!

2 Reply

Joe Archbold

Investor · Batavia, IL · Member since 2014 · 99 posts · 81 votes

10y

Jeff,

"So who are these guys?" I have several 3 units and the tenants are all different: some older, some small families, for some its their first place, and some divorced and making it work. They are attracted for different reasons. Hopefully that means- its clean, safe, close to town, convenient etc.

The trick, even if the numbers work, is to get good tenants either yourself or through a service. I have personally met every tenant that I have on-boarded. It takes time but it is worth it if you are going to occupy it.

Good Luck,

Joe

2 Reply

Eric Brandt

Investor · Gatineau · Member since 2015 · 19 posts · 10 votes

10y

Every person has a different need and want in regards to their housing. For every person that may be attracted to the amenities of a larger building there is the person that wants nothing to do with a public pool and 200 neighbors.

5 Reply

Samuel Sedore

Real Estate Agent · Kitchener-Waterloo-Cambridge, Ontario · Member since 2013 · 408 posts · 90 votes

10y

Originally posted by @Jeff S.:

My current REI goal is to buy and owner-occupy a fourplex. I totally get the numbers. But I still feel confused about the rental market.

My big question:

WHO would choose to live in a fourplex? Who ARE those guys? ( BTW, Name that film....)

In my market (Colorado Springs) it seems like anyone who could qualify for a fourplex unit could equally well just rent a unit in a big apartment complex. In a complex, they would get ammenities like a pool, clubhouse, covered parking, and so on. No way I (or any plex owner) could compete.

The fourplexes I've looked at tend to have a rough feel to them : driveways/parking areas have deteriorated (or no) paving. Interiors are really dated. And yet vacancy rates are low.

So what is the appeal?

In some areas, I've seen people parking their truck (always a truck) on the grass. I've seen garbage (mattresses, furniture, etc) piled up around the dumpster. No apartment manager would allow that.

So I'm starting to wonder if there is a trade-off: "I'll live in a fourplex (instead of an apartment complex) as long as I can be more relaxed about junk, behavior, tenant screening, etc."

Or am I missing something ? As a fourplex owner, what is the compelling advantage I could offer to a potential renter?

I focus on properties like this, I find you can service a different market niche and attract the apartment tenants looking for more privacy and quiet. Most people don't like apartments, I lived in one at 17 and after 1 year found it better to rent a room or unit in a house. You are surrounded by people all the time and there is always something going on regardless of the time, not to mention parking issue.

I notice people who live in multi-family units are generally working class people who like to keep to themselves. With regards to garbage being everywhere that property must have been incredibly mis-managed, this is due to either a useless lazy landlord to cheap to hire management and screen tenants or it could just be the local demographic.

I don't know your area but I imagine if you do the research the answers will become prevalent. Compare all the units for rent in the area find the high and low marks for rent, then find the sweet spot.

In my market I know you can rent out 7/10 condition properties in the right area that are a little dated to great working class single people and small families, and they only cost 10-15% more to buy. But a 7/10 in a bad area will get you low paying tenants who wreck your unit.

2 Reply

Brad Starling

Residential Real Estate Agent · Colorado Springs, CO · Member since 2014 · 61 posts · 25 votes

10y

I think @Samuel Sedore gave you a good idea of the type of people that live in a fourplex. By what you described, I'm guessing you've been looking at plexes on the SE side of COS, near the bases. Move away from there, and you get into units that are a little more taken care of. The cost is a little higher, but so are the rents. Unfortunately, that's the demographics you will get in that area of town. Every once in a while a good opportunity pops up on the SW side (closer to Broadmoor), West side, or near UCCS. And the central area of town is always a good spot, close to everything yet taken care of. Powers corridor is hot right now, and prices are higher than the rents justify, for the most part, IMO. I've also seen that in those plexes that have better management, you get some very long term renters, while the others tend to be more nomadic.

0 Reply

Jeff S.

OP

Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes

10y

Hi @Brad Starling,

The areas I've been looking at (live or via Google) include Old Colorado City/King St., Holland Park, UCCS, and Rockrimmon. Downtown would be nice, but seems pricey.

None of these areas are that bad, really. I'm just trying to get my head around the market. TBH, the 4-plex zone up in Rockrimmon is very tempting - seems a lot more middle-class, surrounded by upper middle class SFHs (and Nature).

0 Reply

Anson YoungBusiness Member

Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes

10y

I'd live in one, if I wasnt married with a kid and 2 dogs. That said, there are 1000 reasons why people do things, and its hard to narrow it down.

Might be close to their work. Walking distance to the liquor store. Up the road from their kid's school. Close to the assisted living center their mom is at. Smaller landlords dont scrutinize credit like the big apartments do.

Who knows. I know in Denver, I would feel comfortable living almost anywhere I could buy a 4 plex. Personally I've outgrown it, having a family etc. But if I was starting out today and younger, I'd go the Travis Sperr route and buy a multi unit and live in one and rent the others. In my opinion, no better way to get started in this business.

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1 Reply

Linda Ding

Denver, CO · Member since 2015 · 2 posts · 0 votes

10y

As a current renter in the Colorado area (hopefully soon to not be), I see benefits of living in a 4-plex. Keep in mind that there are various types of people with very different interests. However, since living in Colorado, it seems that there are an abundance of people who really like to get out in nature with all of the outdoor activities/beauty available with living so close to the mountains. Thus, the idea of having a backyard is significantly more appealing than living in an apartment complex. Granted, I am mainly speaking from the perspective of a late 20 something year old.

0 Reply

Michael Boyer

Investor · Juneau, AK · Member since 2015 · 980 posts · 741 votes

10y

And it can surprise you, Jeff. Looks can be be deceiving. For example, my fourplex on fourplex street has housed an er nurse (I think because no one would house her horse-sized dog or have Harley storage); several people working at nearby mines ( shift workers who really want a cheap place to put stuff and crash for two weeks in town); lots of nonprofit workers, two with graduate degrees ( and again big dogs).. Lots of service sectors folks; a helicopter pilot and web designer; a mechanic, etc.. And , yes, some of these folks had individual or combined income over six figures...a few out earned me! Probably most were attracted by the pets on approval, yard, ample parking, good location, very reasonable rent, great management (or at least I try my best and think I can do as well or better than the manager handling 250 units)....so you may see a pleasant surprise when you get apps... Plus, you are in charge, so pick great tenant/neighbors...

2 Reply

Sam Leon

Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes

10y

All of my multi-family renters (duplex, triplex, quadplex) are single, retired or unattached folks.

They rent my place because:

(1) They want maximum privacy besides a SFR. That means less neighbors.

(2) They can walk to the laundry area within 30 steps, not 2 buildings over. Same goes for the trash dumpsters, and mailboxes.

(3) They feel better to deal with an owner who self manage so less number of people with keys to their place - now this doesn't mean all small buildings are self managed, but large complexes are never self managed.

(4) They know they have a maximum of two shared walls, and for end units only one shared wall, no one above, no one below.

(5) They have a fenced off dedicated area where they can do some gardening or BBQ. Large complexes typically have a large common area, but not private outside areas for individual units.

(6) If they get along with their 1, 2, or 3 neighbors, they can informally resolve guest parking issues, laundry hour issues etc...with large complexes, you don't know, the guy in front of you may have just washed a load of soiled cloth diapers.

(7) Rent is lower, typically. For example, my 1/1 (800SF) units rent for $1100 a month. Behind me there is a large complex of 30+ units, their 1/1 (600SF) rent STARTS AT $1650 a month depending on which floor. They do have new SS appliances, granite countertops and some upgrades I don't have, but I can do that if I want and up the rent too.

1 Reply

Ronald Green

Atlanta, GA · Member since 2015 · 10 posts · 2 votes

10y

If i can add something here,

In my current situation i have a small dog and am purchasing a home but need somewhere temporarily to stay. finding an apartment is kind of a night mare because most places require 6-12 month leases. A multi unit property is perfect because i can explain my situation directly to you (or whomever the landlord is.)

People like me prefer human relations rather than going through a huge corporation that doesn't care about you or your cash. I know what my cash means to the land lord and so theres a mutual respect there where as an impersonal environment of a huge complex chases away whatever fleeting feeling of home they attempt to replicate.

2 Reply

Jeff S.

OP

Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes

10y

Well, frankly, I was hoping to NOT have any horse-sized dogs or short-term renters....

I can relate to not liking fhe crowding of apartment (or condo) complexes or overly strict rules (HOA mentality). And of course I am an awesome guy, so there's another market advantage!

Still, some of the units I'm seeing don't even have a balcony or a fenced in area for a grill. That seems like it would be a deal-killer for a whole lotta folks.

I did, however, do a bit more web surfing and the rents are indeed lower. But I'm not sure what utilities are included in those apartment rates.

0 Reply

Troy Sheets

Developer · Philadelphia, PA · Member since 2013 · 1k+ posts · 902 votes

10y

Originally posted by @Jeff S.:

No family, so that's not an issue.

I'm just trying to understand the mentality. Fourplexes around here are (almost always) just drab boxes without parking or decent paving or updated interiors. If I had $7-800/mo to spend on a rental, why not rent in an apartment complex or a condo?

Or, if I'm a fourplex owner, is it worth the extra effort to update the kitchen a little, take better care of the landscaping, etc. or is that just going to drive away the "typical" fourplex renter?

Can't speak to your market but I live in and own a fourplex and have amazing young professionals for tenants. I'd say my rents are a little lower than a big apartment building for starters but the units are nice, all (even the studio) have washers and dryers in them and we have a nice little community feel here. We take care of each others pets in a pinch, exchange holiday cards and share a meal occasionally. My tenants like being part of the neighborhood, have a plot in the community garden, etc. One has her own backyard, another has a roof deck, so they have outdoor space you may not get in a big complex.

If you're seeing rundown junk and it's fully occupied, that sounds like an opportunity to do better and get higher rents! Another thing two of my tenants (single young ladies) sought was owner-occupied building. They like that I'm on-site to handle issues promptly and take good care of the building and feel a bit safer with my wife and I around most of the time. I also like the fact that they prefer owner-occupied. You're not likely to seek OOC building and then be disruptive or take poor care of it.

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Jean BolgerPro Member

Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes

10y

Comparing a "rough" fourplex with a nice large apartment community offering a pool, etc, is comparing apples and oranges.

Who is going to rent your place depends a lot more on the location and price point and quality than the size of the building. Many people hate large apartment complexes due to the bustle and noise; I'm one of them. All things being equal I would rather live in a fourplex than a big complex- but not in a fourplex that was dated, had trucks on the lawn, or garbage lying around.

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Who would live in a fourplex ?

Who would live in a fourplex ?

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