Single or Multi ?

Question

I am looking to purchase a property in NJ either a single family or multiple family. I always thought that buying a multi family was the way to go when investing. Can you guys give me some pros and cons of what you think is the better way to go.

Ibrahim Hughes · Answer

I also prefer Multi, especially in the tenant friendly state of New Jersey. One tenant doesn't pay and is given 4-6 months by our state's generous judicial system, we can still rely on the other units to help pay the mortgage.

Kyle J. · Answer

Some reading on the topic:

http://www.biggerpockets.com/forums/52/topics/72944-sfh-vs-multifamily-rentals--pros-and-cons?page=1

http://www.biggerpockets.com/forums/48/topics/112014-sfr-vs-multi-tenant

http://www.biggerpockets.com/forums/12/topics/89194-multi-unit-vs-sfh-for-cashflow

http://www.biggerpockets.com/forums/12/topics/90406-sfh-vs-multifamily

http://www.biggerpockets.com/renewsblog/2013/07/03/multiplexes-vs-single-family/

http://www.biggerpockets.com/renewsblog/2013/03/19/single-or-multi-unit-real-estate/

Darren Sager · Answer

Welcome to BP @Joseph Tarallo .  Generally speaking multi family properties will get you a higher return on your capital versus single family however single family are thought to be more easily sold if need be.  That's generally the "rule of thumb" that most go by.  Personally I like multi family.

Eric Scott · Answer

I think, if you are looking for investment purpose, then of course, you should go for multi family. This will provide more value of the property and you will receive benefits from this.

Ali Boone · Answer

Singles: better exit strategy, higher quality and longer-term tenants (typically), sometimes harder to find good management, more paperwork when properties are individual

Multis: better cash flow (sometimes but not always, double-check), counters vacancy expenses, easier management of multiple doors, lower-quality tenants (typically)

It really doesn't matter which you buy as long as you buy a good deal. The deal is good if the numbers work. That could be in hard in NJ in general, so be diligent in checking those.

Alok Sood · Answer

Welcome to BP @Joseph Tarallo . What are your investment goals? If you have the mentality of a long term investor, then selling shouldn't really be a high criteria item (this is what I've been lead to believe). But if you are looking to pick up distressed properties and rehab them to get better rental cash flow and increase the value of the property, then SFR's are generally easier to turnover. Just my 2 cents. Good luck!

Logan Zanki · Answer

I agree with @Ibrahim S

Joseph Tarallo · Answer

Thanks a lot, that is exactly the same conclusion I was coming up with myself.  Multi will generally bring more income, but the single families will definitely be easier to sell when needed.

Joseph Tarallo · Answer

By the way it's going to be a rental property, I do not plan to live in either.

Single or Multi ?

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