What is the BEST Real Estate Investment? | Single Family Vs. Multi Family | Ep. 5

Hey, everybody, Flip and Danny here, co founders of the Freedom Real Estate Group family of companies.

And this is podcast number Cinco.

You know how I know that Cinco.

De Mayo just happened?

This is number five.

And our podcast is Real talk, which is real talk for real estate investors. And as you can see, where, on location. Where are we?

We are in Washington D.C. this is both of our first time here and I think we're both, both excited for the trip and for the little vacation that we said. Hey, you know what, let's record our podcast while we're there. And we didn't bring clothes, we didn't bring the cameras being held up by our suitcase because we didn't bring a tripod.

And our sunglasses.

And sunglasses. Very well. Yeah, yeah. And then, then the hair dryer didn't work.

Yeah.

Oh my God.

Yeah, hair dryer didn't work. So you get me in a ball cap because my hair is still wet. So we are just figuring it out as we go and ultimately we're going to try and do it somewhere outside, you know, in a cool like, destination type setting. But we, because we didn't have a tripod, we're like, we can't do that. We've got a courtyard down here. It's really, really cute. But we didn't have a tripod. We didn't want to lug our. All right, so this is where you get us. Oh, in these seats. I was joking about the fact that I sat down and I tried to put my feet on the ground. If you're a short person like me, sometimes you have such deep seats you can't put your feet on the ground unless you sit at the very, very top. But then I couldn't keep my, my laptop on here because of course we don't have a printer, so we couldn't print out our notes. So we're just doing what we need to in order to get it all done. And so I'm just sitting on cross legged like this just so I can sit back. I have my laptop here so that we can actually host a podcast.

That's right. But nonetheless, we're going through with it.

That's right. So podcast number five, what we're talking about today is single family versus multifamily. And I know I get on the phone a lot with turnkey real estate investors or just real estate investors in general, asking which one's better. Even our private lenders ask, ask us what's the difference between lending on a single family or lending on a multifamily A lot of times my conversation with them is comps. My lending, it's getting harder for me to find good quality comps for multifamily and we get into a little bit of that. But that's what we're talking about today. We're just actually going to do kind of a lengthy discussion, I think. You and Mark did a video about this, right? A vlog video.

Yep. Just a vlog.

Yep, yep. I was trying to watch it this morning when I woke up and the Internet wouldn't let it play. So I'm sure you guys did a rocking job.

Oh, it was awesome. It was awesome.

All right, so I've listed up pros and cons. You've got it on your iPad too, right? Okay, so let's start with single family. And we're going to talk about the pros of single family. So the first one I have on here is better neighborhoods making. Making the units easier to rent. So do you want to talk about the areas that we invest in that are single families residents?

Yeah. So typically in the. Just in the Dayton area alone, there are some areas. One of the areas that we love to get properties on is called Belmont. We actually call that Bell Money. But I love the area because it's a working class area. It's a, you know, it's not A class or even B class, but it's a sort of mixture of B minus to C plus plus plus plus properties. There's lots of great. Even though they're not homeowners, they still take great pride in their properties. The Tennessee group, great product in their properties. The neighborhoods look great. The schools aren't the best in town, but they're not the worst in town either. So it's a real safe area. But I always tell people, if they ever get a property in that neighborhood, call me. I'll buy it without even looking at it most often because I will because it's just such a great area. There's the. There's always a high demand for rental properties there. There's always people looking for places to live in that area. So it's. That's a great area. We can find, sell in that area all day long.

Kettering is really the same way. Right?

Kettering's just right. It's right. Actually, that area is right on the border of Kettering. Kettering. Now you're getting into much better schools. So that area is even higher sought after than Belmont. You know, so they. That's. That's an even better area. Again, it's hard to get Properties there because they don't last long.

Yeah.

But that's another great area to get. And so not only does it make it easy to rent, but also it makes it easier if you want to sell your property. It makes it easy. Very easy to sell a property.

Yeah. So he actually hit on quite a few. Just in that description. He hit on quite a few of the bullet points and the pros. So let's keep on going. So better neighborhoods, making the units. Properties. I use the word units because we're comparing. So when you talk about properties, you think in terms of doors. Right. You have a single family property. That's one door. So maybe we'll just keep using the word doors so that you guys can understand as we're talking about it. You'll really get it when we get to the multi family area. So making your doors, or door in this case because it's single family, easier to rent. Better neighborhoods. Okay, so the second bullet point was attracted a higher quality tenant who takes better care of the property. I think this goes right to what you just said.

Right, exactly. Because there's some areas that we tend to not buy in because the tenants don't care about their property. They don't care about the neighborhood. And you see that driving down the street. And so the areas that we buy in more often is the areas where you can see it's as if they're all homeowners because they take great pride in their lawns, their. The flowers out of the front yard or on the front porch or even their Christmas decorations.

Yeah.

So that you can see that they take great pride in the area and they really love. And they. It's long term tenants too, because they don't want to stay there for a long time.

Yeah, you stole another one right there. Boom. All right, Number three, these properties appreciate more over time. You want to touch on that one? I know we don't talk about appreciation.

Yeah.

Ever. Because we tell you, do not buy for appreciation. Dayton is what? Boring. We're buying here for cash flow. And that's how you should go into any property like this. You know, I've heard many, many times people say that those who bought for cash flow and went through 2008 and that market crash, they still won in the end because they were there for cash flow, not for appreciation. Not to time their sale of their property or, you know, they're just, they're still getting rents and they were a. Okay. Through that entire crash, but it was people who were speculative or unfortunately perhaps getting ready to exit Property right when that happened, and they lost a lot of equity. Fortunately, if they were landlords, then, you know, they were able to just continue keeping the cash flow going. But we don't talk about appreciation a lot, but in single family, this is one of those instances where, you know, properties are going to appreciate over time. Historically, that's even true in Dayton. We just tell you not to count on it. It's the cherry on top.

That's right.

The next one is better school districts. You started talking about better school districts. Is there any other areas you would say besides Ketering that we invest in? Have really good schools?

Franklin has very good schools. It's harder to get properties there. Same with miami'sburg. It's. It's because people are, you know, searching for those. But when a property becomes available, we had a property that we were doing a retail flip on, and we didn't even have to put it on the MLS because people drove by. So we doing work on it, bought it before we even put it on the mls. Yeah, because people are demanding that. That area because of the school districts. So there's. There's a. Those areas that have the best schools. Those are. It's so hard to find properties there because of that. Because people are going there just for the kids sake, to get their kids in the better. Into the better schools.

Yeah, yeah, yeah. Good. Okay. Tenants stay longer.

I touched on that earlier as well. Sorry, I didn't even. I could have hit all these actually. But, yeah, it's when you get the pride of, like it looks like pride of ownership. And the tenants, they want to stay there, they want to live there. They want to, you know, they don't want to have to move and try to find another place. And so they. They've got a great area. It's usually in a great location of town. And so they will stay longer. And that's great for the investor.

Yes. Less vacancy, less turn costs. Couldn't agree more. Tenants handle lawn care and snow removal. This. This one got added because people don't think about this. But if we're going to compare it to multifamily, start thinking about this because it does matter. So I will say this on a big like. So we've got 60 doors in Dayton. We've got other doors across the United States that are single family. But everything we've bought in Dayton has been multifamily. And we're going to talk about that a little bit as we get closer to that, to the last half of the podcast, where we're talking about that. But with a duplex, triplex, fourplex, you can pay one of the tenants to go ahead and take care of, reduce their rent or do something. Just pay them to go ahead and do it. That is very, very common on our 56 unit apartment complex. That's not as common. Could we. We could, but they're just not as reliable for whatever reason once you get into those bigger complexes. So it's something you need to think about that it turns into a pro for your single family residents. Because if your tenant is in a single family property, they pride of not even ownership, they're just the tenant and they love the house and they're going to take care of the lawn and.

Snow for you, right? Yeah. Typically with the single family, it's in the lease that they have to take care of the lawn and do the snow removal. But like you said, the 56 unit, that driveway and the parking lot is so huge.

Yeah.

That's not one person to do that. So that's when you have to hire a company to come in with the trucks.

Yeah.

And that's just the snow removal. But yeah, it's, it's. But again, it was back to the. It's a pride of ownership. But they're tenants, you know, they're acting as if they own it.

Yeah.

But they want to have the best yard in the industry, you know. So it's, it's a, it's a definite perk.

Yeah, for sure. The next one is something I probably hit on the most when I'm on the phone is exit strategy. Exit strategy matters. Whenever you are going to sell, who are you selling to? If you have a single family property you're selling to the world, it could be another landlord. It also could be an owner occupant in a market like we're in right now where things are just selling within 24 hours of property hitting the market. And it's just crazy. Having single family property is just, you know, it's crazy. But I will say we just had an auction happen in the Dayton area for multifamily properties. They're large, multifamily. And they went like all of us investors who invest out here were like, no, no way would we pay that much for those properties. But the market's just kind of crazy. But the buyers for those properties in particular are smaller. You've got fewer people that you're selling to if you, you've got a multi family.

Oh yeah, exactly. The more doors you add, the smaller your buyer pool.

Yes, absolutely. Yeah. All right. You can sell underperforming properties and keep the good ones. I really liked this particular point. Meaning that if you have 10 doors and two of them aren't performing as much as you'd like, if that was a 10 unit, you got to sell the whole thing. It doesn't. It doesn't even matter. And that's actual market risk. That's in the con section of multifamily. If you have 10 single family properties and you've got two underperforming, just sell those two. Now you have eight performing. So you get to, you know, cherry pick and sell whatever you want freely because they're separate buildings. So that's one of the pros I thought that not a lot of people actually talk about. Another one was pest control is better maintained now that you have this one.

Yeah. So with a single family house, you go in and you treat the single family house, and it typically kills the pests, or the pests go out, and they go back out into the yard or back out down the street or whatever. The interesting thing with the. With multi units, when you go into one unit to do the pest control. Well, they go to the other units. Yeah. And so it's. Boy, it's. It's a maze. You know, you start with one unit, and then you got to go not only just to the next unit, but you got to go to both. You just on each side of it, up and up and below and below, you know, above and below. And so it. Because the. It's not. You're not getting the pests out. You're just moving the pest from one unit to the other. So it becomes. I guess you call it a headache.

Yes. And we have personal experience in this 56 unit.

Yeah.

Haven't had, but bedbugs, cockroaches, like, they have it. Just everything, like, there was just some nasty peoples, you know, And I'm just like, why do you live in this? Well, all that happened was, you know, they tried to post all the tenants and say, you know, this is a compliance thing. If you don't let us in to do pest control, it's gonna be violation of your lease. Which we wanted to get everybody out by that point anyway. So it was another excuse to get them out, honestly. But all that happened was just kept on moving unit to unit to unit. And so most of our units, eventually, I think we have 10 evictions left, so they're mostly vacant. And they had multiple treatments just to kill all these bugs. It's been. It's been A treat. So single family pro.

Yes.

All right, next one is lower interest rates and lower down payments. So the ability to get a mortgage on a property, single family Property, it's usually 20% down and it depends on what the interest rates are at, you know, at that point in time. But it's going to be lower interest rate that you'll receive than you would if you were buying multifamily property. And let's make a definition here. So multifamily is anything that is more than one door. So, so you got single family, one door only. A duplex is two door, so that's multifamily. Two to four doors is still residential. Right. Five plus doors is commercial. So there's a difference in the types of loans that you have to get. If you have five plus doors in one building or two to four doors, that's multifamily. So keep that in mind when we're talking about this. It really does relate across the board, except for probably this bullet point here in that you can still get a residential loan for a two, three or four door property.

Right.

All right, and then last one for pros, market risk. You can spread out your single family rental properties, meaning you can buy some in Dayton, you can buy some in Cincinnati, you can buy some in Columbus, Memphis, Tennessee, Florida, Texas, wherever it is. You don't have exposure of buying in only one area in where something happens to that area. And all of your properties were in one area, one place, which is typically what happens with multi family. You can also buy multi family, different states and things like that. But we're talking, we're trying to a little bit compare apples to apples, 10 doors to 10 doors. Maybe if you've got a 10 unit building and it's just there's your 10 doors all in one place. If the steel plant goes down, all the people who are working in that area maybe no longer need a place to rent and you just lost. But if you had 10 doors in many different areas, you've mitigated your risk of exposure because they're not in one spot. Anything to add there?

No, no, you nailed it.

Okay. All right, so some of the cons, this is interesting and I put this con. I couldn't figure out where to put this one. It's comps determine value. So you want to talk about how do you decide on the value of a single family or two to four unit building that falls in the residential category.

Right. So the industry standard is you want to find something that's 20% above and below the square footage. So if it's a thousand square foot house, we'll just do a single family for now. So I'm looking for any house within, you know, within that neighborhood, that subdivision, you know, or up to a quarter mile or a half mile, depending on how far we need to go. That's for the thousand square foot, 800 square feet to a 1200 square foot house, Something that's in that square footage. Then you want to start to go compare, like you said, apples to apples. So if it's a three bedroom, one bath, we want to find other three bedroom, one bath and then try to figure out, try to find houses that are comparable and that have sold within the last first they try 90 days and then they'll go back six months. So we want to find something, properties that have sold that's comparable to the subject property to determine its value. Now the second you get to duplexes, triplexes and four plexes, you just got harder, harder and hardest to find comparables that sold in 90 days, that sold within a quarter mile. That sold, you know, that have the.

Same beds and baths to the rehab quality that we do.

Exactly. To the wall, especially to that too. And so finding comps for a single family property in some areas is very easy in some areas of town. All of the houses in that area are all the same. They're all 10, 40 square feet. They're all three bedroom, one and a half. Yes. Three bedroom, one and a half bath. I love finding comps there because I can throw a rock and find a comparable property. It's, it's easy. But there's some areas where you're trying to find a single family house that then and another house that's sold similar to it and you can't find anything for like half the of mile and or nothing is sold in the last six months. And so it makes it harder. But, but boy, the second you go to duplexes and triplexes and especially triplexes because those are, those are few and far between.

Yeah.

And then fourplexes. Fourplexes in Middletown, there's like three of them. So trying to find three comparable solids is very difficult. And so it's, it just makes it harder and harder and harder, harder, hardest to find comparable properties to determine its value.

I like that. Hard, harder and harder. Okay. So comps determine value. So there has to be comps there to, to say how much your property is worth. So you could have the nicest property on the street. You could have the largest property on the street. It could literally price per square foot be worth a lot more than other properties. But you're never going to get that high dollar top square foot based on putting in the highest finishes or having the biggest house on the block. They actually tell you not to buy the biggest house in the block. And you likely shouldn't, you know, spend a ton on your rehab. We do very good rehabs, high quality rehabs, but, you know, it's not granite. It's not like high end finishes where we're wasting money. We're just putting good quality, strong materials in for a tenant, you know, to use so that there's not a lot of damage. So that's, that's kind of, that's why I put it in the con, because other properties are going to tell you what your house is worth even if you do a better job or have a bigger profit than others on the street.

Yeah, in fact, there was. We had a property that it was the biggest house in the neighborhood. And so when we ran the comps on the property, we stayed within that quarter mile. We stayed within the last 90 days. But when the appraiser came out to do the appraisal, the appraisal came in $20,000 less because the appraisal appraiser would not leave the subdivision even though our house was the biggest in the area.

Yep.

Then the other comps were within that. Within a quarter mile, but it was outside of that subdivision by a block. He still wouldn't use those comps to compare a property and would not budge on his price above that 20. So we lost $20,000 outside of that subdivision by a block. He still wouldn't use those comps to compare a property and would not budge on his price above that 20. That. So we lost $20,000 because it was the largest house in the neighborhood. So not only don't you buy the largest house in the neighborhood for yourself, don't buy it as an investment either.

Good story applies well here. All right, you hit it home. Okay, vacancies, and here's a con for single family vacancies. How long will it take the turn and rent again while you get goosey? You're getting nothing and you're still having to pay for the repairs and the term itself, the mortgage, taxes and insurance, maintenance, utilities, all those things you're still on the hook for while your, if you have one door is empty. And for how long is that one month? Is that two months? Is it four months? You know, so we've got a property right now that was actually Vandalized fortunately, the owner had renters insurance or something, some type of insurance, so that he's getting paid rent while they're trying to do a claim, I think against the tenant. I can't. I don't even remember the whole story. I just briefly heard something. I was like. Because I was like, why has that been vacant? And I freaked out as soon as I saw the thing. They're like, no, no, no, no, it's fine. The owner's actually getting right because he had insurance to cover something like this. And I was like, okay, my heart. Like, I just had it slow down. It's like, we don't do that anyway. So when you have one door or two doors, you know, it's really, really tough to have vacancies. Whereas multifamily, you mitigate that by economies of scale. So that's a big, big one. That's probably talked about the most, I would say, is 100% vacancy. And that being a financial tough time for a landlord paying his bills while no money's coming in his or her bills. All right, next con is buying four single family to match one. Fourplex is typically more expensive and lower cash flow. So what are the price ranges for? Just give me an average price for a single family property.

Single family property, around. Average price around 94, 95,000.

Okay, give me a price of one of the four plexes that we have.

149.

Okay, so he just told you close to 100. So buy four single family properties where you're at 400,000. He just told you a fourplex. 149.

49.

And the cash flow. What's the difference in cap rates versus you got. You've got that 1% rule. Right, right. Really? On the single family. But what does it look like for fourplex?

So the fourplex, I think it was around. It was 149, but I think the rents were like 16 or $1700 a month. So it was close to like a 12 cap.

Yeah.

But the single family house, you know, 99 or $95,000, it's gonna be ready for 950 to $1,000.

Yeah.

So you're looking at right around an 8 cap on those.

Yeah. So big deal. Right. It costs you a lot more money to get four doors in the single family world. And, you know, pretty good 1% cash flow. Don't. That's nothing to sneeze at. That's good. That's what all of us kind of make judgments upon is that 1% cash flow. Some of us have cash on cash. Some of us cap rate. Everybody kind of looks at deals a little bit differently. But that fourplex for 149, what does Randy say? So that was another con in single families that's much more expensive. Expensive and you get lower cash flow. The next con buying four single family is four sellers, four inspections, four loans, etc. And I'm going to add to this four roofs because we're going to talk about that and multifamily. So every single house is its own house and its own negotiation and its own cost center. So again the multifamily, it was one, four doors, same thing. One seller, one inspection, one loan, one roof.

Yep.

So that's a good one. And then loans. So last thing on single family cons is that a single person. So let's just say flip, flip can get 10 mortgages. That's it. That's where it's capped. He can only buy 10 single family houses. After that you have to get a portfolio loan in order to go to 11 and on I, we are married. So if you're single you 10, 10's your limit. If you're married and you don't buy them jointly, flip buys his 10. I can buy my 10 together now we have 20. So but then that's it. You're backed now and you have to get portfolio loan in order to buy more. Whereas commercial loans 5 plus doors in one building now you can get as many of those as you want and the value is totally, it's, it's. We're gonna about to talk about how to determine value on a, on a multi family property. That is five doors plus. So that, that is a con is the amount of loans that you can get for single family before having to.

Go to a portfolio loan. I agree. 100.

All right, you ready to go to multifamily? I'm ready to go start exploring Washington D.C. let's get this. All right, multifamily, we're gonna start with pros. So we just referenced it. How to determine value on a multifamily property. And when I say multifamily this time we're talking five plus. Because residential, as we said before is comps. Right, Residential comps. You have to look at the area and what they're selling at. For five plus doors you're looking at the net operating income. That's how you determine value. That's how loans are based off of is that net operating income. So your goal as an investor is to going all those value adds that increase your Net operating income. So on our 56 unit, there's a few things that I wrote down about how we're increasing the income. We're adding a utility package, and on that utility package, we're getting a $50 a month premium per door. That's a lot of money when you add up 56 times 50. And I can't do it in my head, so I'm not gonna. That's a lot of cheddar. It's a lot of cheddar. Every single month, through that utility package, adding WI fi, we're charging $30 a month for WI fi. That's way. And that utility package, by the way, is a discount to what the residents could get on their own. It would be more expensive for them to get utilities on their own than for us to offer the package that we're offering. Yet we still get the $50 premium. I am going to be doing a video about that in the future with the person that introduced me to this concept so that we can share it with everybody. But that's a different podcast or vlog or whatever it turns into. Yeah, so we added utility package, we added WI fi. So WI FI packages, it's like 50 to $80, you know, through a spectrum or something like that. We're doing it $30 a month, they can get Wi Fi. So that's $30 per door. We have laundry rooms, so that's not a big. It's not big. It's not something that we really are paying attention to. We're actually partnering with a company that's going to provide it and provide the washers and dryers, and they maintain it. And we split profits 50, 50. We have to cover the utilities, they have to cover the maintenance and the actual units. So that's not really meant to be a whole lot, but it's going to be a little bit and more than that. It's an amenity for the residents that are there, that they have laundry facilities and they don't have to go somewhere else. Right. So. And then just building out any type of amenities is always going to help you increase the value to either rent faster or rent higher. And anytime that you can add dollars to the bottom line, you are increasing the value of your property, essentially. So that is a pro that you have a lot more control over the value of your property than you do when you're buying a single family or one to four or, sorry, two to four units. Okay. Economies of scale. Overall, the cost is better. You can't buy as many doors with the Same capital. Can't buy as many many doors with the same capital. I don't know what I wrote there, but I know what I'm referencing sometimes. This was early this morning. I just woken up and I'm like, I need bullet points for her podcast. This is what we were talking about in terms of buying four single family versus a four plex or you know, 10 single families versus a 10 plex or 10 doors in a building. The overall cost is better in terms of acquiring those 10 doors as opposed to doing 10 single single family. So that's what I was meaning to say there. Okay. Repairs and maintenance or less. Because it's all in one house. Right. So if you fix the plumbing across the board, you just fix the plumbing for however many units are in that building all at once. The plumber is going to charge you less because everything is in one location. Your one roof, we are with 56. Our 60 doors is actually six roofs. Yeah. So when we replace one roof, in fact right after we bought, we replaced a roof on the 18 unit building and the eight unit building. So that improved the property and value for two buildings. That 18 plus 8 is 26, 26 doors, boom. Two roofs. That was all it was. So repairs and maintenance, all that's going to cost less. Replacing the roofs, that's a biggie. That's such a big expense vacancies, they're offset with other occupied units. So you don't have 100% vacancy. If we have, if Flip and I have 10 units out of the 60, like that sucks. But we have 50 that are still paying rent. So we're covering our mortgage, our interest, taxes, common area, you know, maintenance, everything. We're covering our bills because we still have all the other units. Certainly once you get to the point where you have 60 single family, you can say the same thing. It turned into the same reality for you. You won't have the same roofs, repairs and maintenance costs because we combined all of our doors under into one central location. But you will have the same effect of other properties offsetting costs. So that does help. But the cost to get into 60 single family as opposed to 60 multifamily is a big, big difference. And so will your debt be a big, big difference. Let's see. Generate positive cash flow quicker because you've got all of those doors, you can scale faster. Meaning buying a 10 unit building is easier than the one seller. One inspection, one loan, one insurance policy. It's just. Yeah, it's just one.

Instead it's easier closing it's one closing.

Yeah.

Not 10.

Yes. Everything's easier.

Yes.

With multifamily.

Yep.

So anything that I miss on pros, before we go into the cons, there's a lot of this we talked about in single family. So now we're just. We're really kind of highlighting now. Remember what we talked about up here about cons, Our pros down here?

Yeah. It's just. It's. It's putting everything in as far as your investments. And on hyperdrive, when you have one property and you're getting $1,000 a month, that's one property, $1,000 a month.

Yeah.

Now say we have 10 properties, 10 units, and that each unit is making $900 a month. Well, so now that's $9,000 a month, you know, so it's just putting everything on hyperdrive and making your investments grow faster.

Yes. Yeah. Good. Love that. He's a smart pepper.

All right, I've had my coffee.

All right. Multifamily, cons, common areas to maintain. We said this is something a lot of people don't talk about. We have common areas in our apartment buildings that we have to, you know, clean, and that's a cost center for us. So keeping that in mind. Lawn maintenance and snow removal. We talked about that up there. That's not something that we pay our tenants to do. It's something we pay to have done. So that's another cost center for us. Pest control. We gave you the story already. It's been a nightmare. I am so glad we are doing a turn.

Yeah.

You know, and trying to get everybody out anyway just to clean that place up, because it certainly helped us. But even as people were vacating, there was still like, another unit's got bugs. Another unit's got bugs. That's just because they kept traveling and traveling. Can you imagine the occupied. Like, what a nightmare.

Yeah.

So we've got these. We bought these. Do you remember what they are? They're like discs that. That we put, like, in every single unit. And as long as you change them out every 90 days, they should keep away all bugs. And they don't stink. They don't do anything. So as we're filling units, that's one of the things. You know how you do biannual inspections of properties and you check the furnace filters and make sure that they're being changed because tenants usually aren't changing them. So that's one of the things that we want to keep on doing, but doing it on a quarterly basis to change out those. Those bugs because it's such a horrible thing to have bugs in a multifamily property that to mitigate it is the wisest move.

Yep.

Up front. One geographical location putting you at risk if something happens. We talked about this, right?

Yeah. Because if you're. Because now you don't have the 10 houses all over the. All over town or towns. You just have one location. And if something happens with that city, with its economy or, or just whatever, all of a sudden, boom. They can see all of them.

Yes. Yeah, yeah, that's tough exit strategy. Smaller pool buyers.

You talked about this. Yeah, exactly. Again, the more doors you add to it to a unit or two, a complex, the smaller your buyer pool. I mean, you talked about the auction recently. There was a unit on there. There was a, it was a 42 unit. Now it was an auction. So I knew that there were going to be more buyers at that auction, but that's it. Those were the buyers, you know, probably maybe a handful of buyers for that. And they were all bidding on it until. Well, until it went beyond making sense. But yeah, smaller buyer pool compared to a single family property. Completely.

Yeah. And the last one we have is higher interest rates, higher down payment. So we talked about that a little bit. You're going to have to. To put more down for a commercial loan and your interest rate is going to be higher than a risk control loan. So that's, you know, one of the cons. But as we kind of wind this up, because that's our pro con list, I'm going to ask you first, between the single family and multifamily, I really believe it's goals, it's personality. How much risk do you want to take and in what areas do you want to take? Because they both have risks. Certainly as an investor, we all know that we are buying property to build wealth. Legacy sometimes, pass on to the kids sometimes. But there's risk in investing that's, you know, that's just part of the game. So it's determining which risk that you're okay with. So single family or multifamily?

Well, multifamily all day long.

Yeah. And why?

Just because like I said earlier, it hyper drives your investing. You know, if we want to do 10, 10 properties and they're all single family properties, like I said, we're going to get the thousand dollars a month per property. But if we do the 56 unit and then an 8 unit somewhere else and then a 20 unit somewhere else, that's just hyper driving our investments. It's bringing more money back in.

Yep.

And then especially with creative, you know, creative financing. Creative solutions on how to do this.

Yes.

And, you know, opm. Other people's money.

That's right.

So it's, It's.

That's another podcast, baby.

Sorry, I don't mean to get ahead of myself. Yeah. I. Multifamily all day long.

Yeah. I'm with. I'm with Flip at multifamily all day long for all the reason he just said it. And some of the cons that we talked about in multifamily, even though we. One geographical location that he just mentioned, we can mitigate that. Use that word too much in this podcast already. But it just, it's appropriate by buying something in a different location. We don't have to buy all of these, you know, apartments in our backyard. It can be somewhere else. So that we are taking the risk away, even though this is part of the risk in multifamily.

And by all means, this is. That's what I feel.

Yeah.

I'm not, I'm not saying everyone needs to go and buy multifamily. That's not what I'm saying. Saying at all. You need to be comfortable in whatever you do.

Yes.

And this is what I want to do, and this is something that I'm comfortable in doing. It will be something that I want to continue to do more of.

Yep. Yeah. You got to make your own choice based on the risk you're okay with and the goals that you have. I know a lot of people that single family, hands down, they're like, that's. I want single family. I'll buy 10 of those.

And I don't.

I don't want 10 doors for all the pros that we listed there. So you. It's up to you to decide. We just gave you all the pros and cons, so we're going to wind down. Yeah. Is there anything else that we're going to touch on?

No, I don't believe so. But again, we hope that you enjoyed this podcast of the pros and cons of single family to multif. Family. You know, here we're in Washington, D.C. we don't. I mean, it doesn't matter where we're at. We're constantly seeing more real estate, constantly getting leads. I gotta leave. There's a house right down the street. I think it's what I think it's gonna. I can't remember how many doors, how many. It's. It's a lot. Like 50 bedrooms or something like that. I think there's a tenant. He just signed a four year lease just, just recently. But I think they want. I think they want to own financing for it. But anyway, it's. We're always talking about real estate, no matter where we go, and the architecture here is absolutely amazing.

It is.

But we hope you enjoyed this podcast.

This is real talk, which is real talk with real estate investors. This was podcast number five, and we like to end it with invest smart, live happy. Bye, everybody. Bye.