SFH vs Multi
Curious to know others thoughts and to give my 2 cents as a 25 yr old with 30 single fam rentals. I like to get other perspectives to see if I am thinking about it wrong.
Multifam seems to have been the clear winner over the last 20 years but has become so commercialized above maybe 30+ unit buildings and it’s harder to find value add. I’ve been seeing recently a ton of people that bought post covid with their balloons coming due and rents not pushing where they thought they would be that have significantly lower values and losing investors capital. It seems it’s harder to find the better deals and companies need to keep buying because they have to keep their fees coming in which forces people to buy mediocre deals. Rents in a lot of the sun belt have stayed the same or gone lower in some markets like Austin because of being overbuilt.
Single family seems to have a lot more opportunity for value add because it’s not as commercialized and allows for the little guys to pick up deals. Since the market is based off comps and what home buyers are willing to pay to live in it the properties can appreciate without rents having to get pushed higher. It’s more of an emotional market that investors can’t match. I’ve seen the Midwest has some solid positive cash flow single family properties. I personally only buy stuff where I can get my capital out of. My current portfolio sits at about 50% LTV so I have some equity to be able to trade up into larger assets without raising. I feel the emotional market in the lower cost areas is the better areas to be in because u get a mixture of cash flow with the ability to get equity without having to push rents.
Let me know your overall thoughts on the future of the different products and what you might do if you are in my shoes.