Single Family Home vs Fourplex

[Rachid B.]

Hello everyone, 

I have an investment SFH property in Houston that's bringing me $1600 a month. $5000 annual tax, $300 HOA annually, $1400 insurance, low maintenance fees. $75k equity. mortgage payment $571 but I have been paying $1000/month (if I keep it at that, the house will be paid off in 11 years).

There is a fourplex for $150K in Trenton NJ that's bringing in $3000 a month, but that comes with $1300 a month on average expenses. 

My question is. will it be better to buy another SFH property in Houston for the same cash flow or go with the fourplex in Trenton?

Regards,

[Mike Hottinga]

@Rachid B. sound like you made up your mind already, but if you gave some more info with how the numbers break down on each property we can give better advice than generically saying, "multifamily is the way to go." Also consider how friendly the states are towards landlords, Texas > NY from what I read. Also consider the leases and tenants that you will be inheriting.

I have an investment SFH property in Houston that's bringing me $1600 a month. $5000 annual tax, $300 HOA annually, $1400 insurance, low maintenance fees. $75k equity. mortgage payment $571 but I have been paying $1000/month (if I keep it at that, the house will be paid off in 11 years).

-What is considered low maintenance fees? $50? $500?

-PM cost?

-Cap Ex. budget?

-Does the property need rehab?

-$5000 + $300 +$1400 + $100 (low maintenance guess?)+ $0 (no mention of cap ex)+ $0 (property management?) = $6800/12 months = $567 expenses. $567+$571=$1138. I think you should be closer to $1300-1400 in monthly expenses with Cap Ex and PM. So $100 to $200/ month cash flow for this door.

-You will need to buy a plane ticket to see this property

There is a fourplex for $150K in Trenton NJ that's bringing in $3000 a month, but that comes with $1300 a month on average expenses.

-$1300= Taxes, insurance, maintenance, PM, Cap Ex?

-Will the property need  any rehab?

-Will you self manage because it is in NJ?

-$150,000 30 year mortgage with 5% down at 5% is around $1064 a month. $1300 + $1064= $2364.  $3000-$2364=$636. $636/ 4 doors =$159 per door if these numbers include everything.

-You can check on this property more without a place ticket.

I have broke down the numbers as best I could based on what you provided. The multifamily makes more $ if $1300 is your actual total cost.