Multi-Family? Are they all the same?

2 Replies

When buying multifamily properties, does it matter if it's a duplex, multiplex or more than one structure?

I have the chance to get a property with a small 2 bedroom house, and a large double wide with full basement that can also be rented separately.

With income potential of 3 places, I would like to know if purchasing a property like this is as good of an investment as buying a multiplex property?

Are there any downsides?

Other than being harder to sell when the time comes, are there any downsides to purchasing this kind of property?

Thank you in advance!

HI @Jess Kinzel ! Does it matter in terms of income? Nah, the tried and true income-expenses idea can hold true either way. The biggest area this will impact is the financing. If I went to buy a lot with three separate houses on it that were not designed to be a triplex, a lender would likely consider it a single family purchase with some non-conforming parcels on the lot. If I bought a triplex, though, they would consider it a triplex and they would consider the rent from each unit as income and the financing would be a little simpler, especially if I will be living in one of the units.

Yes, it matters. More units under one roof = lower roof expenses per unit. All of your units being in one place also makes management a bit easier.

Downsides are that it's more to take care of. More maintenance issues to look out for, more tenants to manage. However, you should also be making more money for your trouble. If you're buying in an active market you shouldn't have much issue selling.

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