Investing in 4-plex vs 5+-plex properties?

[Kevin OBrien]

As I've started looking into multi-family properties, Ive come across a number of people who are trying to promote their approach to investing. One of these has been that there are some who are big fans of 1-4 unit properties, and some are fans of 5+ unit properties. Some of the investors I've come across have even gone astronomically higher than 5 units and heavily pushing commercial instead of residential. I've also read varying opinions on residential vs commercial loan options and issues with both.

 My question to the BP members is, what made you choose the property size you did to start with? Were there specific reasons or was it what was available?

[Jimmy Deringer]

@Kevin OBrien

I think it comes down to what you’re better equipped to handle. If all things are equal (except the number of units) and you can satisfy the down payment on commercial then it makes sense to go for more units (same amount of work for more reward). if you have better connections, lenders, and leads on <4 units then I’d try and pick up a few more of those.

I had a small commercial multi family last year with multiple buildings on one lot. It was difficult to get the refi completed so we ended up selling. The small 2-4 units were easy home runs on the refis since our lenders were comfortable with those.