Multi Family Investing in "A" Markets?

[Christopher Doyle]

My wife and I have finally decided that as responsible parents we need to find a market that is more conducive to raising a family (city is slowly losing its appeal). After seemingly endless discussions with Jonathan Cope about investing, I am going to heed his guidance and only purchase quality assets. We have decided to move to Fairfield, CT which has high quality schools, tolerable property taxes and a decent barrier to entry. There is sufficient single family inventory on the market currently, and I'm fully confident that we would find a fit eventually. However, I'd be remiss if I didn't explore the option of purchasing a multi family and minimizing monthly expenses. Margins will undoubtedly be rather tight, these properties tend to trade at a bit of a premium, so thinking more longer term return. I'd be curious to hear feedback on multi family investing in "A" markets, specifically where the majority of the inventory is single family. How are returns? Glaring downsides? Thanks all

[Jaysen Medhurst]

@Christopher Doyle, my wife and I went through the same process when we left NYC a few months ago.

We initially looked into multi-families. The challenges we found were that:

1. Even in a great town like Greenwich (Fairfield in your case) the multifamilies are in neighborhoods that were not desirable, at least not now that we have kids.
2. Multifamilies are expensive in an expensive town. We looked at a duplex that was over $850k. The compromise wasn't worth it. Even with $2500 in rent from the other unit.
3. Don't expect cashflow. The more expensive RE means cashflow is very difficult to attain. 

That being said, we found a great coop and haven't looked back. Feel free to reach out with any other questions.