Single-family Homes vs. Small Multi-family Investing

[Hunter Beckstrom]

Hey BP!

I am still a rookie in real estate investing and am looking for some insight. For context, I am located in Minneapolis, MN and have been househacking a duplex for a year. My question is: should I continue investing in small (2-4 units) multi-family or single-family homes?

More Background:

My current goal is to be a 'small but mighty' landlord/investor (check out Coach Chad Carson if you want to learn more) in the Minnesota metro/suburb area. I am also dedicated to the 'buy and hold' strategy. I imagine the easy answer to this question could be to diversify with both investment types, however, I am looking for the pros/cons of each from y'all's point of view. I have some thoughts already. For instance, small multi-family has similar financing and offers faster scalability. On the other hand, single-family (typically) provides a tenant pool that can be more manageable and longer leases, and I am assuming maintenance and capex could be on a smaller scale, but I could be wrong on that. 

Appreciate everyone's time!

- Hunter

[Manny Vasquez]

Knowing what I know NOW, I would advise anyone that wants to be a real estate investor to purchase multi-family as much as they can. IMHO and all things being equal, this route would be the fastest way to cash flow and scale.  
I got started many years ago with a Single Family home, however, I was green and didn't know anything at all about real estate.  After my first purchase I quickly discovered that the fastest way to scale was through multi-family and so I set forth on a new path.  I did purchase some multi-family properties, however, along the way I also discovered "excellent" single-family home deals that were too good to pass up.  

Pros and Cons are:

1. Multi-Family can provide more cash flow (Pro) but it will also require more management (Con)

2. Multi-Family may require more maintenance (Con) but that cost may be offset by installing a coin-operated laundry room (Pro)

3. Generally speaking, Single family homes can be sold a lot quicker than multi-family. (Pro if you have a SFH, Con if its multi-family).

4. If someone moves out of a Single Family and your property is vacant for a month, the entire payment is on you (Con).  If you have a multi-unit and someone moves out, then you only have to come up with partial payment or maybe nothing at all if all units are cash flowing (Pro for Multi-fam)

5. Insurance will be higher for multi-fam than Single Fam.

6. If the Multi-Fam does not have individual utility-meters for all units, then you have to figure out what to do or it can potentially eat away at your cash flow.  99% of Single Family homes do not have this problem.

These are just a few pros and cons.  I hope this helps and good luck on your journey!