Moving up to Multi family from SFR

[David I.]

So have 5 SFR's under my belt and handle most of it myself - they are all in good areas of town and knock on wood I have had some pretty good tenants. Things go wrong but they have been understanding and I have people that help with plumbing or other issues.

I want to move up to 4 plexes but hear horror stories of course. I know the tenants in a 4 plex are paying less than in a sfr so you are getting different types of tenants. Also I know many may be out of work or making less due to covid 19 so I have to assume 4 plex tenants who didn’t make as much before may be making less now or have possibly been laid off.

But even before that I just know from deductive reasoning the tenant in a sfr I’m collecting $1,495 a month from is going to be different from the 4 plex tenant I collect $600 a month from.

I know sfr are easier to sell if need be and have greater appreciation. However know the cash flow is potentially much greater on multi.

I want to expand and keep going. 4 plex then 6-8 plex, eventually heck a 100 plex.

Help me get past the doubts? Thanks.

[Nicholas Lohr]

@Lori Agajanian  I highly recommend you fully exhaust all other options before embarking on a new build. All other options being that you can find an existing property to buy and fix up.

I bought a 4-plex a few years back that only used half the lot and thought to myself, "yeah why not I'll just throw in a few more units back there."  

2.5 years later I finally completed it.

In literally a third of that time I bought, rehabbed, and refinanced a much bigger property and made the same money. (and it was WAY easier)

For example, when you're in month 6...7....8.... and still going back and forth with the building department about design, plans, etc... you'll see what I mean.