Should I invest in SFRs or a Small Apartment?

[Christopher Middleton]

I am in the process of selling my 3 rental properties which will leave me about $100k in cash. I am very excited to be in this position, but I am on the fence about purchasing more single-family residents, or if I should start investing in apartments. 

I typically invest in slightly distressed single family homes, rehab them, then rent them for a couple of years.  To do that with 100k means I may be investing in 4 to 6 homes. That is a lot of work.  Or I could take that money and do the work one time and invest in a small apartment building? 

I would use a similar strategy on the apartment where I buy it slightly distressed, rehab it, and raise rents and lower vacancy to increase my equity.

I live in DFW and the single family market is white HOT. So I will have huge competition to get a good deal on a SFR.

WHAT WOULD YOU DO?

[Curt Davis]

Well what price range are you looking to buy an apartment at? With only $100k you would obviously have to finance. I am not too familiar with the commercial type of financing so I dont know if they will finance something needing repairs as for SFR homes the banks require the home to be in good condition.

My suggestion is if they are cheap apartments most likely they will be in low end areas. ROI and cash flow will be great but not if the place is a pain. Maybe stick with SFR unless your buying a nicer apartment building.

Good luck!!