Folks,

I'm sure there are plenty of thread titles like this however mine is a bit different in the fact that in Austin TX where I invest, for some reason Duplexes cashflow less then SFH which is anoying because multis are suppose to cashflow better and investors selling should know this.

I have seen hundreds of MLS listings of Dups and SFH only to show that a SFH with the same SQFT as each side of a Duplex is much less in price.

So now I'm stuck wondering if I should just buy multiple SFH since they actually cashflow?

I'm guessing this is due to investors selling Duplexes and families with equity selling SFH but I don't know.

Any advice or info on whether or not this is normal?

Let me give just one example.

There was a 290,000 Duplex 5 months ago that I made an offer on. It was last years construction. Each side was around 1200sqft and rented for 1100/1200

Now my older SFH not to far away is also 1200sqft but rents for $1050. Pretty close figures only that my SFH cost me 117,000 (comps were 100k) I took first offer.

Ok so if you divide 290,000 by 2 you get 145,000 for a $1200sqft house (each side) that rents for $1200 max. Each comp was same build, same price and same rental income. So whats the incentive to buy multis? I'm bummed.

You haven't found the the right deal yet. There are 8 to 10 units fully rented at 500 a month for 200,000 in my state. Put 20 percent down and you are still cashflowing thousands a month.

The great thing about multifamily is it's zoned commercial so usually when redevelopment comes along you cash in for a great price. A sfr in a subdivision or a high density home area you are stuck to that one use and exit strategy.

Hope this clears it up for you.

No because it doesent explain why SFH cashflow more the Multi's in Austin TX. I have been pondering this for the last couple years.

I'm sorry your choice in Georgia sounds like awsome cashflow however I bet you have to collect rent with a shot gun.

Can you do me a favor and forward me the address to this cashflowing place so I can do some demographics and such?

I Like Multi-Families because of the anonymity it provides the Tenants. When there is: excessive Prostitution; Weed Gardening; commercial Drug Dealingl; a Meth Lab started, or something as simple as raising a batch of Pit-Bull Puppies, A Multi Family allows one or more Tenants to take action and report it. In Duplexes, and even Tri-Plexes, Tenants are often intimidated and will not say or do anything for fear of repercussions. Then the activities go on far longer until something occurs that is serious enough to bring the Authorities to the property.

At SR's 10 Unit, Rent Collection might be like One-Stop Shopping and the economics could make it worthwhile to hire an Armed Body Guard.

PostScript: Though it may not be illegal, I've also had Tenants absorb Extended-Stay Families of 6 or 8 people to share the expenses of a 2 Bedroom Apartment and then overflow the allotted 2 parking spaces with 5 cars. The Anonymity of a Multi-Family often gives Tenants the Courage to nip these occurrences "In the Bud".

We have Mexicans and Guatemalans do this with SFR homes all the time. The landlords are accused of being slum lords. Sometimes they know what is going on and other time not.

Example they will have a 3/2 or 4/3 home and they will charge one guy 1,700 when the going rents are 1,100 then the mexican will have ten people in there paying 200 a month. He will give the 1,700 to the landlord and pocket 300 for himself.

Of course the breaks renters laws and fire codes because if a fire occured there are too many people to evacuate safely without casualties. Our city inspector inspects these home soften but the problem is the city works form 8 a.m. to 5 p.m..

These people work during the day so you can never catch them ALL living there at one time to cite them for a voilation.


I actually don't collect the rent. I use an IREM company and build in those management costs into my pro-forma with my offer for purchasing.They deal with the phone calls,rent checks,evictions,marketing,site maintenance etc.

This is the number one mistake which is people handling there own properties. The problem is they pay to much for the property upfront making paying management and doing upgrades for later resale and exchange into something bigger impossible without taking a loss.

As far as multi-family some sellers are holding onto cap rates of years past 5 or 6. Realistic sellers are pricing at a 9 to 10 cap to sell. These are older b or c class properties. (A) class brand new with high rents can still get a 6 to 7 cap from institutional investors and insurance company purchasers.

I don't understand your problem. You can buy SFHs that cash flow. So go ahead and buy them.

You don't take advantage of economies of scale with tons of SFH plus management and all that increases. Then it will cost more to buy because your paying multiple closing costs, fees, inspections exc.

If anybody actually invested in Austin they could tell me the secret to buying mulsties which was what I was hoping for because I don't think it's right to sell a similiar dup for more then what two SFH that produce the same income costs.

Pro you just need a broker in your area who understands multifamily and can find you the deals.They are out there...

Will do..Thanks