Small multifamilies are scarce. Should I go smaller, bigger, or stay the course?

Question

I’m a first time investor looking to househack with a small multifamily (duplex, triplex), but they are scarce and competitive in my area. I’m not interested in renting out a room in my primary residence for safety and privacy. Should I go smaller (e.g., house with a mother-in-law suite) or bigger (e.g., small apartment complex)? Frankly I haven’t considered going bigger until now because I’m intimidated by the idea.

Noah Waldron · Answer

Hi @Elaine Raymond,

We ran into this same issue a couple of years ago and decided to do the basement house hack as a substitute for a traditional duplex. Our rent almost totally covers our mortgage. My wife had safety concerns at first as well but we've both been more than pleased with how it's gone. I'd be happy to connect you with her to get the safety perspective or show you our setup. You can take a look at pictures of our basement unit on my profile and shoot me a call or text if you want to come see it.

Ryan Thomson · Answer

@Elaine Raymond

Going bigger than a fourplex will require a LOT more down and higher interest rates. I would stick to residential multifamily or below.

Here is what I look for in single family: an easy way to split into multiple units, a walk out basement, an ADU, a garage I could convert, or lots of bedrooms.

Run the numbers and see what works best. Reducing your living expenses and considering the net worth ROI of owning real estate, paying down your mortgage, long term appreciation, and tax benefits will make it a great investment.

Daniel Apke · Answer

Commercial can be tough, i'd stay 2-4 units for your first one. Put more emphasis on finding a duplex or quad you should be able to in the ATL market. If you're really struggling finding a good deal, consider directly reaching out to owners via text or postcard. That is a good way to get the conversation started.

Lucia Rushton · Answer

@Elaine Raymond where do you live or where are you looking ?

Michael Dumler · Answer

@Elaine Raymond, anything larger than 4 units is considered commercial. As noted by Ryan above, going commercial will make things much more difficult than you need them to be for your first deal. Focus your criteria on single-family homes with an in-law suite and small multifamily. I may have already asked this in your last post, however, what submarkets are you targeting? Feel free to reach me via cell or email if you have any additional ATL house hack questions (contact info is listed in my bio).

Alli Breighner · Answer

Hi Elaine!

I'd love to discuss all of these details with you and get the ball rolling for your first investment.

Feel free to shoot me a DM, I'd love to chat!

Small multifamilies are scarce. Should I go smaller, bigger, or stay the course?

Most Popular Reply