Single Family, Multi-Unit or Commercial Property?

[Brock W.]

Hello BP friends-  

Looking for input from you smart folks. I own a rental valued at $160 k. In preliminary inquiries, I'm told I can expect to be able to borrow 80% LTV. Assuming this, I now have $128 k. I'm wondering about the various merits of purchasing another Single Family Home,(advantage a multi-unit (free of any HOA associations, ideally), or a commercial property for rent to another business (not housing my own business). For the sake of argument, if all the properties are priced the same, can anyone speak to relative advantages and disadvantages of each property type? Cash flow chief among them. Perhaps relevant, I don't mind being a hands-on landlord in terms of maintenance, acquiring tenants etc. As always, with these questions, I'm wondeirng if I should give more detail, but for now will leave it at that. Thank you!

[Thomas S.]

SFH are very high risk now with a impending turn in property values. Also SFHs, unless you buy the cash flow, generally have low to no positive cash flow. The only problem with commercial is that when you have a vacancy you can expect it t be a very long vacancy. You need deep pockets to ride it out.

Safest/best option I believe is multi family. Value is driven by rental income, easy to find properties with rent below market (hobby landlords) and have much better cash flow and security due to having multiple tenants under one roof. Also lower expenses per tennat than a SFH.