Newbie - Single Family lot vs Multifamily lot

[Laura Ayala]

Hi there!

I am new to investing, and wanted to get some feedback on what someone with more experience would do in this situation, as this is all new to me, and I seem to be in "analysis paralysis."

There is a multifamily lot for sale in my area for $65,000, and a single family lot closer to the city for $47,000. I don't make a lot of money, so I can't afford a large loan (no more than $80,000). I'm not sure whether to buy the multifamily lot to later re-sell, buy the multifamily lot to later build 4-plexes on the lot (but it would be at a much, much, much later time), or just buy the single family lot and build a rental?

Ideally, I'd like to build the 4-plexes in order to live in one and rent the other 3., but as someone with zero experience, would the single family lot be my best bet? Or would it make more sense to buy the multifamily and re-sell for a profit and use those profits to buy my first rental?

Any help is appreciated!

Thank you,

Laura

[Tom Ott]

Originally posted by @Laura Ayala:

Hi there!

I am new to investing, and wanted to get some feedback on what someone with more experience would do in this situation, as this is all new to me, and I seem to be in "analysis paralysis."

There is a multifamily lot for sale in my area for $65,000, and a single family lot closer to the city for $47,000. I don't make a lot of money, so I can't afford a large loan (no more than $80,000). I'm not sure whether to buy the multifamily lot to later re-sell, buy the multifamily lot to later build 4-plexes on the lot (but it would be at a much, much, much later time), or just buy the single family lot and build a rental?

Ideally, I'd like to build the 4-plexes in order to live in one and rent the other 3., but as someone with zero experience, would the single family lot be my best bet? Or would it make more sense to buy the multifamily and re-sell for a profit and use those profits to buy my first rental?

Any help is appreciated!

Thank you,

Laura

 Be careful of the allure of MFRs. It all comes down to the numbers. MFRS have more costs that people forget about. You, as the owner, have to pay for grass cutting, snow removal (if you have any), many times there is only one water meter and you need to pay for the overages. Also, tenants treat MFRs more like an apartment than a home so you will often have a reoccurring vacancy.

In SFRs, tenants have to pay for all of these items and they feel more at home and are likely to stay longer.

Try looking at: Single Family vs. Multi-Family Investments