2 Bed 1 Bath model. Whats the good and the bad?

[Jacob G.]

I have seen a lot of investors talking about buying a smaller SFR with only 2 bed and 1 bath. (Not the ones that have 3rd bedroom potential) Im talking about a less than 1300 sq ft home.

It caught my attention as it is significantly cheaper and would rent similar to a 3/1 SFR. What's your thoughts on this?

On a quick and rough analysis, I think it is great on a cashflow basis. However, Im afraid of the potentially difficult exit (if i want to sell eventually).

It would also be hard to do "value add" or find market comparatives (?) maybe..

Anybody with experience on this? Or any insights would be really appreciated! 👌

[Corey Hawkinson]

@Jacob G. Each investor is different. In no way am I saying that my way is the “correct” way. I wanted to start out by saying that.

Personally, the largest units that I would want to invest in would be 3/2. I love the 2/1 places because the younger generation seems to appreciate smaller homes. I believe those homes are set up to hold their value as the millennial generation ages. (That’s my opinion, no one can 100% predict the future)

They also typically require less maintenance. If the numbers work, go after 2/1 properties.