Single Family or Multi-Family?..Calling all the guru's

[Gursewak Singh]

Hello guys,

  I was talking to few investors in my Area basically told me to stay away from SF? They are advising me to get into Duplex, triplex or 4plex. I do have enough money saved to comfortably put 20% down. I live in Dallas/Fort worth Area. Can anyone of you guys point me into right direction?

Another thing, I get worry about really old(1960-1970's) Multi-family, start thinking I may have to keep putting money into it? Is this true?( I do understand I may need to rehab it.) 

 If anyone is in Dallas area, I would love to grab a lunch/Coffee & do some networking.  

Thanks Guys...BP rocks.

[Jordan Moorhead]

@Gursewak Singh do you alr aye own a house? I would buy a multi, 60’s and 70’s aren’t that old. We have 1880’s builds here in Minneapolis!

[Gursewak Singh]

Originally posted by @Jordan Moorhead:

@Gursewak Singh do you alr aye own a house? I would buy a multi, 60’s and 70’s aren’t that old.

We have 1880’s builds here in Minneapolis!

 @ Jordan Moorehead I am not sure, what do you mean alr aye own a house? I appreciate advice  to buy Multi..

[Jerimy Justice]

The age of the home shouldn't be a deterrent because its still not very old. I'd make sure you are getting a good deal on it and that should help you with the updates. I would have a contractor walk around the property though to make sure that the bones are good and you don't have any unexpected expenses. Good luck my friend!

[Bjorn Ahlblad]

Gursewak you can make money and lose money either way-singles or multi's, old and new. All have their fans and detractors. Singles are usually easier to sell and you have no tenant to tenant conflict and newer should be easier to maintain all things being equal; but they never are. Multi's offer economies of scale; but it is far more important that you master the fundamentals of investing and set your goals and objectives. It is easier to start with SFR and duplex and make up your own mind as to your preferances. There is no right or wrong with singles or multi's; but there is definitely a right and wrong with how to make money. All the best!

[Jordan Moorhead]

@Gursewak Singh sorry... own a house!

[Thomas S.]

Multi unit investing is a cash flow play where as SFH investing is primarily an appreciation investment. Value of SFH properties is driven by home buyers where as multi units are generally driven by rental rates and investor markets. They may both appreciate but SFHs are more unpredictable, higher risk depending on buyer markets and economy.

For lower risk, investment stability and maximum cash flow multi units are best.

[Gursewak Singh]

Originally posted by @Jordan Moorhead:

@Gursewak Singh sorry... own a house!

Yes, I do. 

[Gursewak Singh]

Originally posted by @Thomas S.:

Multi unit investing is a cash flow play where as SFH investing is primarily an appreciation investment. Value of SFH properties is driven by home buyers where as multi units are generally driven by rental rates and investor markets. They may both appreciate but SFHs are more unpredictable, higher risk depending on buyer markets and economy.

For lower risk, investment stability and maximum cash flow multi units are best.

Thomas, Thanks for making this very clear. It makes perfect sense now. I appreciate it Sir. 

[John Woodrich]

Multifamily are typically produce better cash flow but a good deal on a SFH can out perform a multi. I have both types of rentals, I like the houses a little better as they seem to be less work and you don't have to deal with tenant/tenant drama.

[Gursewak Singh]

@John Woodrich, @Thomas S. @Jordan Moorhead @Bjorn Ahlblad, @Jerimy Justice Thank you all for reply & courage. 

Here is another one at you guys.

Duplex property In fort worth, TX

Asking $ 225,000

ARV $ 205,000

Year 2006

SQFT 2226

Both side occupied $ 1250 Each(Section 8 tenants for 3+ years) 

Owner only want to do owner financing only for 5 years @ 10% with 20% down. I offered all cash, he doesn't want to do it due to Tax issues. How would you guys able to tackle this? Is this even worth it too look? 

Been on market for ever Since may 2018. Actually he bought it for $171000 in May & listed 2 days later for $ 225, 000. 

TIA.

[John Woodrich]

@Gursewak Singh I won't purchase a property over ARV and his terms are horrible. Add in Section 8 and I am out.

[Jordan Moorhead]

@John Woodrich I know a lot of people in Texas who get 10% interest. It's nuts!

[John Woodrich]

@Jordan Moorhead wow..  Suppose some people are willing to do anything to make a deal work.

[Gursewak Singh]

I appreciate it. I guess it may be common in Texas but I am not desperate, I will wait for the right deal. 

[Jerimy Justice]

I'm in agreement with everyone on this. If you buy above the ARV is he winning or are you? He definitely is winning. You always makes your money when you are buying and you need equity. When I buy I try to be 15%-30% below the ARV. I understand that he doesnt want all that money in one year because he doesnt want to pay a ton of taxes but I do feel like at 10% you are getting hosed for sure. I really feel like you are doing the right thing's by looking for guidance and analyzing deals. Practice makes perfect and patience is the key to finding the right deal. I believe in you buddy! GOOD LUCK!