I'm debating whether or not making a cash offer on a single in TX would get me a better deal and cash flow over leveraging myself by financing multies for roughly the same down.

Duplex for 180,000 (70k out of pocket)
Tenant principal payment = $100
Tax writeoff = $100 (28% of $5000/12) = $100
Appreciation in the next decade = 0
Rent increase in the next decade = 0

Ok so basically if your cashflow is at the breakeven point for financing a duplex, basically you are earning $200 dollars a month.

Compare that to buying a single in cash for 70k that rents for 8-900 and after expenses you can see $500 a month.

200 vs 500? So what is the advantage of leveraging yourself out with mortgages?

The advantage is you leverage yourself out on the right properties at the right price so you see a tremendous upside. I can go on Loopnet ( a big commercial listing service ) and about 75 to 80 percent of the listings are trash in this market. (They still believe it is 2004 and are going to get between a 6 and 7 cap)

With 70k you should be able to land maybe a 6 or 8 unit with owner finance. Many multi units are mismanaged and when purchase and rehabbed properly you can have huge upside.

When purchasing if going rents are 500 a room I will run my return numbers off of 425 a room. This way I can have one of the best rents in the area with nicest amenities and only take the most qualified tenants. Occupancy will also constantly be full.

It's just like anything else in that you have to buy at such a price that even in bad times you are making money. What has happened is many purchased at the market peaks and are now saddled with properties where the numbers don't work and are trying to sell.

The single family house might be a better bet if you can't get anything else for the 70k.

Yeah they say cash is king. Times like these I think it's better to take advantage of liquid cash over lower interest rates. I'm sure I can get a steep discount by flashing cash.

I hate to see the SF property that you buy for $70K in the Austin market. And in reading your thread about the duplex, it sounds to me like the rents you are using for your calculations are low (unless the property is the scariest in Leander).

Not true, if my SF 1200 sqft home in Round Rock rents for $950 and is next to Dell exc then I wouldn't think the Leander place given the same build and sqft would be the same.

Even at $950 I would be looking at cashflow of 200 tops unless your interst rate is 5% (which mine is not)

best to buy cash if you have it. Just look at how much my tenants pay into my principal. I would say 50-100 bucks. The other 500 is interest.

The homes next to Dell that I can imagine renting for that amount are older, in high-tenant occupancy areas, tend to have major foundational issues and are not places I would live just for appearance sake. It is an area that is dominated by homes that have been neglected with regard to updates and deferred maintenance is common.

Most areas of Cedar Park and Leander would rent for more than those neighborhoods adjacent to Dell.

I would *love* to know what you are going to purchase in Leander for $70K. There are only 2 properties in the MLS under $75K in Leander. One of them is a one bedroom (what investor would want that) and the other is a rural cottage (can't imagine that's what you are talking about).

My point is with 70k you can leverage yourself into a deal with much more upside. It's always better to deal with one rooftop then tenants spread all over the place in multiple areas dealing with multiple sets of problems.

I would rather replace one roof on an 8 unit then 8 roofs on SFR homes.

Hope you find a great deal. Good Luck

I did not find any particular interest in Leander. I was using it as an exampl

Super, thanks. BTW insurance covered the last roof but I get the idea of economies of scale. ps..I would never want to own 8 homes anyways.

Have you heard of a C.L.U.E. report ? It stands for (comprehensive underwriting loss exchange).

It's basically an insurance risk report for houses. Every time you file a claim yes insurance will pay out most times. Owners think it is great as they pay nothing. 1 claim is not bad but when multiple claims are filed over the years it will make the property harder to sell in the future.

Some lenders won't loan out on it for the new buyer or an insurance policy on it will cost 3 times as much annually.

(comprehensive loss underwriting exchange) typo