deal or no deal - SFH or Multi-family

[Frank Ma]

I am a newbie and would greatly appreciate your advice and comments

I am looking at two opportunities and not sure which one is the right path or neither one. I am looking at a new SFH at EaDo, very close to the new Eastside Project. It is about $350k and the current rent is low $2300-2500, the idea is to hold the property through leasing for potential high appreciate when the new city center is built.

At the same time, I am evaluating a multi-family investment opportunity 5 plus unit, 1970's, all 1 bedroom 1 bath and rent is $690-720. Rent is $4600, HOA 1200 and Tax $5600.

Please let me know your thoughts

Thanks

[Chris Hopper]

Don't buy a deal "hoping" for appreciation.  Unless you have A LOT of reserves.  I loaded up on 4 plexes in Montrose in '06 (about $6MM worth) riding the 12-14% appreciaition wave thinking it was never going to end.  Then 07-08 hit.  I didn't have enough reserves and took a major bath unloading them just to get out from under the payment with negative cash flow.  There's enough deals out there that will cash flow and appreciate, you don't have to "hope" for one.