What would you prefer to buy, market rate rents vs bmr rents

[Sudeep Jain]

Between two properties, one with market rate rents, and another with bmr rents, but both at the same GRM, which one would you prefer? Obviously, with the BMR rents, there is a tremendous potential for appreciation if the existing tenants leave, but as a landlord in Oakland, there is no way I know of, that can make a BMR tenant with several years of tenancy leave.. If I was in their place, I would not leave either!

To flesh out the scenario, one unit is a fourplex with three tenants paying 50% of what market rents are in the area today, and one unit is vacant. The second unit is a duplex that will be delivered vacant and caters to a 'higher end' tenant. The GRMs are the same for both, roughly 12. Both units are expected to have perhaps 20-40K$ worth of deferred maintenance, but the duplex is about 20 years 'younger' than the fourplex. Further, the operating cost of the duplex will be a few thousand dollars less than the fourplex.

So which one would you prefer and why? I would really like to know your thought process behind the preference.