Mixed Use Vs MF

[Raj Patel]

Hi everyone,

Still planning my next move. 

I was looking to purchase either mixed use or multi family later this year. Budget anywhere from $2M (35% down) to $2.8M (25% down). 

These are the benefits I see: 

Mixed use

Retail space(s) brings in a long lease and stable income. Much easier to evict, and obtain rent due. Far less needed in landlord maintenance. No need for updating space later on as new tenants will do it themselves. Less chance of a tenant lawsuit. Negatives would be less in the expected rental income due to long lease. No guarantee in finding a tenant due to rise in E-commerce. 

Residential space would bring in more per square foot. Constant flow of tenants if one leaves and safe. Negatives would be maintenance issues, and need to update space as time goes on to bring in quality tenants and rent. Eviction much harder, and no guarantee of back rent due. Shorter lease terms causing anxiety.  And possible legal exposure from tenant. 

The logic is with a mixed use space you get the best of both worlds so I’m leaning towards mixed use. 

But with mixed use your loan options are mostly limited to conventional. You can't get DSCR. Conventional brings with it many challenges to get approved, and limitations.

Was wondering what everyone’s thoughts are? 

Mixed use would be in NYC 4 boroughs or northern NJ.