which of these two is the better deal..

[Dan Lam]

I am currently shopping for a multifamily in eastern mass and have narrowed down 2 deals that are both attractive in their own ways. I am under the gun to place an offer on property #1 and would like to get some feedback from a seasoned investor as to which of these two is the better deal? (Both properties are in the same city, both are turn-keys) Property #1: - 3 family - sale price: $850,000 - total cash needed (downpayment + closing costs): $115,000 - total rental income per year = $90,000 - PITI: ~$5,000 Property#2 - 4plex - $850,000 - total cash needed: $56,500 - total rental income: $78,000 - PITI: ~$4,800 Obviously property#1 cashflows better albeit at a higher initial investment. Conversly, the cash-on-cash return on property #2 is much better due to the lower cash required up front, which means better leveraging of my money.. Should i sacrifice cashflow for leverage??

[Account Closed]

Your numbers dont compute. Both properties have the same price. How can PITI on property 2 be less than property 1 and at the same time put down half the cash?! The loan on property 2 should be higher shouldnt it?

Also, Property 1 gross rent ratio is higher even with one fewer unit. Means its in a better neighborhood or better units. I would go with that option any day.