Multi Family or Office Building? I have one of each in mind.

[Cory Asrilant]

Hi everyone.  I'm looking for some advice/opinions.  I have $220K in a 1031.  I named a 12 unit multi family (3 four-plexes) and a 15,000 sq foot office building near Reno NV.  I have some experience with multi family, but zero in Office Space.  After all expenses, it appears that the multi family could cash flow between 6-10K a year to start.  The Office Space appears to cashflow between 18K-22K a year to start.  Both are the same asking price of $1M.  The MF is 100% occupied.  The Office is 66% occupied (4 or 6 suites filled) and it still cashflows as above (those 4 tenents have leases through '18 and '19).  If I fill the other two spaces, that gravy on top.  

Office building day one has a 7.5 CAP and 7.3 Cash on Cash return. The MF is 5.5 CAP and 2.5 CoC. I have financing for both. MF is 3 conventional loans 30yr fixed at 4.875. Office is 25year amort with 10 year fixed at 5.875. Both are 25% down.

Both properties appear to be in great shape.  The MF is in a lower income area, but decent.  The office is in a downtown area surrounded by government buildings.  

The cashflow for the Office is so much greater and the potential is so much greater, but so is the risk.  I understand that rents go along with the economy and tenants could be challenging to find in a recession.  Losing one tenant could be a bigger hit in the office building rather than the MF.  

Which would you do?  My thoughts are that the 6K i'd get from the MF is a nice to have, but doesn't make a big impact on my life.  But $20K/year+ could catapult me into the next level of investing to purchase more and larger properties. 

Thoughts? 

Thank you.