Originally posted by
@Frank Chin:
@Xiaowei Li
Agree with @Jaron Walling, I invested in both, and I had better outcomes with small multi's compared to condos.
I purchased a condo to live in and some years later, 2 more as investments. They were new in the sense one was a high school totally transformed into a condo with glass elevators, another a former aircraft factory converted into brand new condos.
What were the problems? The HOA of the condo I lived in cannot project it's expenses correctly, does not collect enough monthly dues, fall behind on it's bills such as electric and gas for central heating, and forced to have special assessments to pay them to prevent shutoff. The newly renovated rental condos I bought had a landmarked roof requiring a million dollars to replace and each owner is assessed $10,000.
I just can't predict cash flows in these situations. However, I made my money on it buying them in market dips, where prices can plunge more than 50%, and sell them for 2 or 3 times what I paid for them. Cash flow is positive over time, but with HOA's in charge, unpredictable in the short term. Condo prices seem to fluctuate more and that's where I profited.
I have better luck with small multi's and know the deficiencies of each when making the purchase, and plan accordingly. I am not at the mercy of HOA's where you're blindsided with special assessments.
My dad owned a small mixed use property, built in 1890, but through the years, utilities are updated to standard, and one such property is enough to see him through retirement. It consists of 2 stores, one large 8 room apartment, and 4 garages. He retired at age 60, mortgage free, and with commercial tenants, tenants handle utility and repairs. He had the opportunity and cash over the years to buy more properties, but during the 70's and early 80's, high interest rates, felt he can do better with cash investments, and he did OK with them without the headaches of real estate. He bought the property in 1963 for $25K, we sold it in 2015 for over $1.1 million after he passed. Overall, it funded his entire retirement, with over a million left over.
