4 unit properties are the best target right now!

[Henry Lazerow]

Thought this would be helpful for any investors having a tough time finding their next deal. Focus on 4 units! Over the last year I have seen absurd appreciation in 2 unit and 3 unit buildings. Many 2 units which were selling for $330k for example Irving Park/Albany Park are now selling $430k 1-2 years later. What we have noticed though is that 4 unit properties have not seen these price increases. 4 units which used to sell $550k to low 600s are now selling 580k+ which still work great for cashflow. I just got a 4 unit in Irving Park under contract for a Bigger Pockets member and have an offer pending on a 4 unit for myself right now too. 

The 4 units tend to be easiest to manage also vs having multiple buildings. I house hack a 4 unit on the north side.

[John Warren]

@Henry Lazerow this is true in the southwest suburbs as well. I do tons of business in Berwyn and a lot of 2 units are selling for more than 3 units even. I think a lot of us investors forget that regular home buyers purchase duplexes all the time and they are not thinking in terms of ROI. They are thinking about where to put their couch!

This is related to why FHA doesn't require self sufficiency on the two units. Otherwise, all of the two units would instantly be worth 20-25% less.