Real Estate Agent · Greenville, SC · Member since 2016 · 24 posts · 14 votes
Simple question that has been nagging at me. Im sure there are multiple caveats to the question but I will try and keep it simple.
Why do most investors say that the money is in multi family?
Example:
I have an opportunity to purchase a duplex, great location, decent return, 18%. Or I could simply pick two single family homes from the list that return the same rate of 18%. Obviously the initial thought is replacing one roof rather than two, but other than that, in my opinion, the two single family homes have a better chance of appreciating quicker if I decided to sell down the road.
So did I answer my own question? Duplexes are for your long term buy and hold (10 years or more) where as SFR are quicker turnover once that market gets hot?
Thanks in advance. If I need to throw out any specific details, please let me know.
Rental Property Investor · Dayton, OH · Member since 2017 · 246 posts · 225 votes
8y
I think the options are pretty similar. In my limited experience and thought, a duplex vs. two SFRs don't make for too many differences. 8 doors vs 2 SFRs, seems to create more contrast. If your CapEx is comparable between the two, and if all of the other extra expenses are a wash, I'd say it comes down to personal preference.
A solid SFR (especially with a garage or basement) has a propensity to attract more long-term tenants. An incalculable advantage...
It all depends on the numbers.
In general, duplex has a better return rate than SFH in most cities.
If both duplex and SFH have the same return rate, for certain, I would buy 2 SFH instead of the duplex.
My rule is, do the math first, then pick the one with the better return rate.
If same return rate, always pick SFR.
Lakewood, OH · Member since 2017 · 8 posts · 1 vote
7y
I know is an old thread. But I'm a newbie. Question; the lender asks for a %15 down for a SFR and 25% down for a multi (2-4). Now, here in Cleveland, it seems that when I see a multiple I have to renovate more than one kitchen, different bathrooms, etc. It is tying my limited capital. What do you think would be better, in order to grow? Start with one multi, or buy 2 SFR?
I know is an old thread. But I'm a newbie. Question; the lender asks for a %15 down for a SFR and 25% down for a multi (2-4). Now, here in Cleveland, it seems that when I see a multiple I have to renovate more than one kitchen, different bathrooms, etc. It is tying my limited capital. What do you think would be better, in order to grow? Start with one multi, or buy 2 SFR?
2 SFRs all the way. They are just a better investment.
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
7y
Totally depends on your market. I was dead set on finding a MFH for my next investment, but in my market, the rents don't support the prices. I'm a huge fan of 2 BR SFHs in C+ to B neighborhoods.