Multi-family in SD or SFR in SJ?

[Brian Tremaine]

Hi,

I'm trying to decide if I need to change my strategy with a SFR I own in SJ clear & free. The market value is $675K and the rent is $2400 (below market but includes a recent increase). My NOI as a % of equity is 3.5%. I have owned it for 25+ years so taxes are low. I have taken 100% depreciation on my taxes.

I'm considering a MF Triplex in San Diego. If I assume a 700K purchase with 590K down in a 1031 exchange and I can get $3300/mo total rents my NOI is 2.6%. Cash flow is $1525/mo compared to $1943/mo for the SFR.

The numbers seem to indicate I should continue to hold and not move up to a MF. I own 3 other similar SFR in the same scenario. The only advantage might be getting a newer building.

Also, I am in my mid 60's and plan to semi-retire in 5 years so these properties are needed for cash-flow.

Thanks in advance for your help,

Brian