Right now - which of these ways would you invest your $200k?

[Andrey Y.]

I would love your gut and honest opinion on this. $200k to invest. High risk tolerance. Single B/B- 8-10 unit apartment with a 7-9 cap rate OR 8 turn key properties (pick your market or markets).

[David Krulac]

I've bought and sold over 900 properties and have owned small apt building, as well as:

1. SFH

2. Duplexes

3. Townhouses

4. Condos

5. Farms

6. Timber land

7. Mixed use

8. Commercial

9. Subdivisions

10. Scattered vacant lots

I like apartments a lot, had one grossed about $750,000 in rent while i owned then sold it for 6x what I paid for it. But I can make a case for SFH also, some of the things i like about them:

1.  Tenants pay all utilities, reduces expenses

2.  Tenants mow lawn and shovel snow for free

3.  Tenant bring their own appliances, reduces appliance repair and replacement budget

4.  Tenants stay longer have had two 30 year tenants, plus 23, 21, 18, 17, 13, and a bunch of 12 year tenants.

5.  Tenants take better care, and often think of house as theirs especially when they stay long term.

6.  Tenants don't know each other.

7.  Financing is better, lower interest rates, longer term fixed rates and smaller down payments.

8.  Most people prefer detached single family housing over other options.

9. There is a lot more inventory of SFH to pick from when you buy.

10. When you sell SFH, most buyers (in my experience over 90%+) are owner occupants who pay retail market value for the property. Some times the buyer is the tenant who lived there for years, have sold several tenants who have been there 3-4 years, taking the house for along term test drive, then buying. Economies there selling to existing tenant, no painting, no clean up, no junk removal, and no real estate commission.

11. When selling MFH, buyer will almost always be an investor, who will likely hammer you down on price and terms, and will buy the property based on income generated. Owner occupant SFH buyers couldn't care less about income generation. And I've never had an owner occupant buyer for a MFH ever. I'm sure there is some outlier somewhere, but just like a unicorn, I've never seen one.

If I had $200,000, I'd buy SFH, 90% LTV, worth $2,000,000 scattered in good owner-occupied neighborhoods with good schools, low crime and near employment. I'd either buy Twenty $100,000 houses or Ten $200,000 houses or some mix of those.