re: Information for my fellow Real Estate Investors

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Has anyone here jumped feet first into REI with a large multi family property 8-10 unit? Assuming the actual numbers work, of course, is there anything that should sway us away from looking at this as opposed to starting with single family or small MF properties to cut our teeth?

We're looking at one and would like any pros/cons/advice.

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Lots of chinese investors invest in nothing but MFH because that is what they are used to in china's urban areas. Go through all your checkpoints as laid out in my original post. is it a high rental area percentage wise? are the normal rents good enough? would you need to do work to raise rents? is raising rents doable? comparables? occupancy rate? decent area? Then run all your numbers and see what the PCF would be per unit.

Yes, MFH are better per unit than SFH. also they help you with exposure. If you buy right you can have some vacancies (depending on number of units bought) without causing you negative cash flow. Yes you will pay more down (if not a cash buy) and you SHOULD pay higher taxes on MFH. A con is with MFH your exit strategy is pretty much selling to investors and not people who rent a SFH from you and offer to buy one day. That's happened to me aplenty. Now with multi you've got more furnaces, A/c's, water heaters, etc. have all that inspected closely before you buy. It's more maintenance but with more cash flow it should even out over time. If you are doing 1 year and 2 year leases that's no different than SFH leases so I do not see it being any riskier turnover wise. You are actually less exposed for reasons I've stated above. When a SFH is empty there isn't any cash flowing. not so with MFH depending on units. I would be more careful and vigilant though before buying a MFH. You want great renters who can fulfill their leases and renew leases and spread the word about your units.

Bottom line is you have to get the cash on cash return and the monthly PCF that you want but being realistic. Are you planning on managing this yourself?