how is multi different from SF

[Heather U.]

I have 5 SF properties but now am looking to buy a multi (might not be 5 units-hope this is still the right place to post.)  With the SF's I feel comfortable with my criteria I use to decide to buy or not and I feel I have a pretty good idea on what to expect as expenses etc... But last night I started looking at Multi and I suddenly felt overwhelmed!!

Please teach me what is different between the two so I can be prepared.  What expenses do I need to consider?  What criteria do you use when analysing a deal (is it pretty similar to a SF?) Is it still possible to get do a conventional loan at %20 down? 

ETc.... all ideas and thoughts welcome. Thank you!!!

[David Wolber]

hi @Heather U.

Alright, breeeeatheeee... :) So i started the opposite and owned multis before SFH for investments but now own both. The thing about larger mutlis is you will have a common or "house" electric meter which you won't have (usually) with a SFH. Water / taxes / insurance / basically everything is that many times more expensive. So don't panic when you see utilities costs with a lot of numbers on them. You now will own that many more toilets, appliances ect...but i'm sure you get that. There is also that many more ways to SAVE money as well when you start looking at putting in efficient toilets and low flow shower heads ect...

as far as financing, 4 or less units is considered residential so it'll have all the same options as you would as a SFH. Even owner occupied house hacking. Unless you are buying in an LLC. Once you get to 5 and over than it's a commercial deal and everything is more expensive and down payments are min 20%. But the short answer to your questions is yes, yes you can still get a conventional loan with 20% down if you buy it in your name.

When it comes to calculations it's all a percentage of rental income right? So since your rental income is higher, so will your reserves and expected expenses. What ever you use for a CapEx percentage for a SFH, should pretty well hold true for a multi. With some variations such as a SFH may have the same size roof as a up/down two family.

Sorry, i'm really just rambling.... haha

I hope that helped a little.  Let me know if you have any other specific questions, I will be happy to answer.

-Dave