Re: Single family vs. multi family - Posted by Ronald * Starr
Posted by Ronald * Starr on June 23, 2001 at 12:28:31:
Dan-----------------
In the world of real estate finance, all of the properties you are talking about are lumped into the category “Single family.” The loans for 1, 2, 3, and 4 unit properties are the same. Once you get above that the financing is quite different.
What you are referring to are called by many “Plexes.”
In my opinion there is little difference between these different investments, but maybe that is based on ignorance. I have one duplex and several single families.
In comparing single family and plexes vs the multiple-unit properties (5 or more units), I think a large part of it is individual choice. I prefer the single families and have only once tried to buy multiple unit properties (unsuccessfully). I have a good friend who had SFRs and moved on up to apartments. He has three complexes and does not want single families again.
I’m not convinced that there is a difference in appreciation rates between 1-unit, plexes, and multi-unit properties. I would doubt that there is. At least over a longer-term period such as 10 years or more. Over a few years there might be some difference for the different categories of property.
When you think of investing, think of CAT, the benefits of owning income properties. C is for Cash flow, A is for appreciation, T is for Tax benefits. If you are in a market like CA where there is huge appreication and, frequently, negative cash flow, I would suggest single family properties. If you are in a midwestern state where this is little appreciation, you might go for the cash flow: plexes and multi-unit properties.
Good Investing******Ron Starr