Multi family versus single family rentals

[Darrell Cole]

Hello bp, I am wanting to convince my partner to step up and go multi family rentals rather than continuing to acquire sf rentals. I think in my mind its the obvious step in an upward progression but I have yet to win the debate. Im looking for help in forming a good argument for going multi family. Thanks!

[Thomas S.]

Money. Lower cost per door to get in, price based on income rather that home buyers market, higher cash flow per door, lower repair costs, lower vacancies, lower risk when housing market drops.

These are all the arguments you have likely already used. If this is not convincing enough then your partner is focused on appreciation speculation and there is nothing you can do till the market crashes.

Investor or speculator, you have a uphill battle if the dollar signs he sees are in appreciation.

Many of these type of investors also believe in paying down mortgages and building equity. Try showing him that equity is killing his cash flow. With the high cost of buying cash flow at 10% on opportunity money every 100K in equity is reducing the cash flow on income properties by $833/month. Equity is where cash and cash flow dies.