All Forum Posts by: Tyler D.

@Tyler D., I think whether or not you get greater returns from multi- vs. single-family homes depends on location and property class. 

@Tyler D'Alessandro

The “best deal” is wildly subjective to countless factors, and dependent on your goals (must be more specific than long term cash flow). What does that mean, both in terms of dollars and time?

I want the option that has the highest return. If buying a 5 unit apartment returns 20% more than 5 single family homes, I want the apartment. If the opposite is true, I want the SFHs. This is keeping REI as passive as possible - I'm not interested in self-managing or flipping, etc.

Are you looking to supplement your income with a few hundred $$ in rental income? Are you looking to accumulate $xxx,xxx in 20 years to put your kid through college? Are you looking for enough cash flow to retire? What’s your desired timetable for each of these?

As much as I can get. I'm not going to put limits on anything, but at the minimum, $3k/ month in cashflow from PM'd properties. Again, I'm not going to give you a strict timetable because I'm not going to put limits on this, but it should take no more than 3 years.

The answer to each of these questions affects your strategy and therefore affects what you should do with your $200k. For me, my goal is to have $10k in monthly cash flow by November 2028. For now, my plan is to use a mix between multifamily and partnered BRRRRs in Charlotte and Gastonia, NC. I am looking for multifamily deals with enough cash flow to pay them off in 6-8 years to help get me to $10k, and in rehabs I’m looking to leave no more than $10k in any deal with a minimum COCROI threshold on each deal.

Ok. Goals are nice, but what I'm asking about are the methods used to achieve those goals. How did you decide on multifamily and BRRRRs? Why did you choose to invest in NC? This is the meat of the topic, and what I want more info on.

@Tyler D.

The decision on the strategy is in your hands. However to give you my perspective, when I was deciding whether to take SFH vs MFH route, I realized that the economy of scale plays a huge factor for me. Let me explain. Let's say you're buying 5 doors (5 SFH vs 5 unit building). Do you prefer to have 5 closings or one, do you want to replace 5 roofs or one larger one, do you want to pay your attorney five times for closing or pay one fee, last but not least: when each of your SFH is empty, you have 100% vacancy; when one of five units is vacant, you only have 20% vacancy. This logic helped me make a decision.

Here's another post describing why I chose MFH:

https://www.biggerpockets.com/member-blogs/10850/74895-five-reasons-why-i-chose-to-invest-in-multifamily

@Tyler D'Alessandro answer is entirely dependent upon a multitude of questions. How much cash flow? What's your market like? Are you willing to invest out of state? Are you wanting to BRRRR, or just buy and hold?

I live in Charlotte, NC and am looking for small multi in Gastonia, a little west of town. Charlotte metro area is terrible for multifamily houses, and even SFH buy and hold properties that cash flow well are hard to find.

You have 2 options in my opinion-be flexible by letting your current market dictate your strategy, or be flexible by letting your strategy dictate your market. All depends what’s important to you

@Tyler D.

Depending on your strategy it depends. If your buying with 20%-25% down, will the property cash flow and can I borrow the remaining funds. Can I pay cash with my money, or other peoples money and refinance it (BRRRR strategy). At the end of the day the cost of the property and whether the rent is $1000, $1500, $2000 is irrelevant. The question should be based on the factors you had mentioned will it cash flow and can I refinance it, depending on your strategy. I like to tell people the asking price for a property is meaningless. What does matter is what you are willing to pay for a property. A good deal for me might be a terrible deal for you. It's all relative.

Good Luck.

@Tyler D. part of the reason you don't see much of this is because these criteria are incredibly local and will carry less value here on BP since this is an international platform. I can tell you that here in the Berwyn area I recently bought a 19 unit for $57,000 per door if that helps. The average rents for 1 bedrooms runs $900 per month, and the average rent for the 2 bedrooms runs $1150 per month. 

I also picked up a six unit in Cicero, IL recently for $47,500 per door. The rents are lower at $900-1000 per month for the 2 bedrooms. 

The thing is, this information still isn't useful to you. I also bought both buildings "as is" with all the city code violations, and you would literally have to spend hours and hours understanding what that means. However, as you can see I am closer to the 2% rule than the 1% rule even here in the Chicago market.