Should I buy a Single Family Home Rental or Multi Family?

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🔊 PLAYLISTS:

[alfonsliguori]

Ideas for future videos:
- How to find hard / private money lenders (especially longer term)
- how does a typical (longer term) private money loan look like
- seller financing
- should you use a turn-key company?
- should you use an agent?
Keep up the good work! 💪

[jackieshabo]

I love my SFH’s. My tenants in the SFH’s are so much easier than my 4plex units. Plus the equity growth has been better on my SFH.

[williamjohnson]

SFH rental properties work well for me. Just got approved for an investment property loan on 1 of my 6 rental properties. The loan is for a significant amount and at a very reasonable rate and monthly payment schedule.
This will certainly position me better financially.
I look forward to closing on this loan which will be another major debt weapon for me during these turbulent financial times.

[UltimateBargains]

An alternative to apartment buildings is to acquire a "horizontal apartment building" of small residential properties (single family detached homes and up to 4 unit multi-plex properties). In that case, the price per dwelling unit is higher than apartment buildings, but the expense per unit is much lower as the tenants pay for their own utilities and have a sizable deductible on repairs.

Also look for distressed properties for fix, rent, and refinance. Residential loans are limited to about 10 distinct properties per borrower. Commercial loans are not limited to 10 distinct properties. After you acquire several of these cash flowing properties and reach the limit of individual residential loans, then apply for a commercial blanket loan to cross collateralize all of the properties into a single loan with a partial release clause that allows you to sell individual properties as you wish. Then you can increase your commercial loan limit each time that you want to refinance your next renovated property.
There are low fixed rate, fully amortizing commercial loans targeted specifically for residential properties.

You can buy distressed properties, renovate, rent, and then refinance so that the entire project costs are recovered and your retained equity is entirely created. Then your effective yield on your created equity is infinite, because you have no cash invested. If you cash out more than what you invested, then you have reserves in case of vacancy.

You can acquire and dispose one rental at a time, while an apartment building must be acquired and disposed all units at a time.

[mecheckraise]

I agree what you say is true. Apartments have a ton more turnover. Long vacancies have not been a huge problem for me but yes when the unit turns over I have costs. Single family is easier to sell. Yes the expenses are more for multifamily.
I think a sweet spot is fourplexes with two up and two down but it is all about the numbers. I find single family houses for less than a door on multifamily.
I bought a 6-plex for $26k and triplex for $12k but they are the exceptions. Most multifamily properties I see are very expensive.

[JohnDoe-npzk]

Well I actually disagree with not paying their water in terms of them maybe watering the yard. Septic is nice cause you include that and might as well give them garbage too cause they compare to the apt that includes that. Of course if it's stupid pricey city water with no real yard might as well make them pay all of water sewer and garbage. Anyway your arguments make sense as to SFH vs. MFH ESP. NOW!

[jsexton]

I prefer sfh, because that is where me and my wife would prefer to live. We looked at some condo/apartments to invest in, but while visiting them I had flashbacks from the military dorms and apartment days as a single person. Neighbors to close, smoking neighbors, loud neighbors, parking lot no garage, etc. I have seen many multi-family condo/apartments (1970s models) come on the market for 50-60k per door for 2beds-1baths. They do come with $282 monthly hoa fee each. The rents have been averaging $700 for the units and many have renter/occupants through Nov/Dec2020. I figured I would want/need rent at $785 to get 1% per month cash flow. Do you think these multi-family condo/apartment units have hit the market because the current renter/occupants are claiming forbearance (or renters not paying for the next 6 months) and the current owner/invested are wanting to cut their losses for the rest of the year, due to the current situation? I don't like hoa fees at all, but do you ever like multi-family condos/apartments, what kind of deal would it need to be?

Jon from Florida

[APerson-zfrz]

My family and I have about 1.5 million in SFH all paid off with nobody that pays past the 1st. Its on cruise control. Yes its only 4 houses and I could have bought a bunch of units but we all have jobs. Its not as sexy to say I have 4 SFH over 50 units but man its sexy to sit at home and collect 85K in truely passive income.

[hdtwalden]

Three years ago I considered shifting from SFH to MF . .. . for about 15 minutes. Then I did the math and considered the pros/cons and took a pass on it.

[mohamedfaiadsw]

A while ago I remember you made a statement that banks won’t lend to investors that have 4 rentals in their name. So my question is after I get to 4 rentals how would I finance getting another mortgage other then using private money?

[ED-ymgm]

Are you talking about the 2, 3, 4 plex? Or apartment complex?

[akbartaj]

unfair comparisons. Can't compare 1 unit financing to 50 unit multifamily. Try to manage 50 SFR to 50 unit multifamily and see how it stands up against bad debt, financing, and maintenance than we can have a more clean comparison.

[danbrow]

Grant Cardone said multi-Family..way to go.