If you have 0.5m cash, what will you invest now

Bay Area
42

Newer SFH is better than an old 4plex

43

Can you explain in detail?

44

Easy to sell SFH, better appreciation. Yield is similar

1 Like
45

I think that HOA is really eating into the bottom line.

46

How can yield be similar on 4plex vs SFH? You have numbers to back this up?

47

Hanera’s number is similar to OP’s 4plex

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48

$750 HOA is for the whole year, negligible

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49

Ok then it’s fine.

50

They could be in different neighborhoods.

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51

Yeah, hanera’s neighborhood is more upscale and more knowledge workers. 4plex could be in a blue collar neighborhood. Only lower income people live in 4plex since Austin SFH is so cheap.

OP’s agent asks him to sell and buy every 3-4 years, seems a very bad idea.

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52

I think it should be the other way around because that 4 plex could only manage to generate the same cash flow as the SFH, so the 4 plex should be in a better neighborhood.

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53

I actually think @hanera’s rentals are too big and too fancy. Huge houses have more surface area for things to go wrong. Maintenance could be an issue later on. They are still practically new so won’t see those issues for another 10 years maybe.

Austin is “cheap” only compared to Bay Area. One danger for Bay Area people is the reverse price shock and they overspend.

2 Likes
54

I think those beat up 4-plex could appreciate faster. Maybe they are in downtown?

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55

Surprisingly I find that multifamily discount is only a Bay Area thing. When I look at other states, multi unit doesn’t have a higher yield. Maybe due to a lack of rent control threat. Maintenance is also easier for multi family.

Some agents hate to sell SFH to investors in order to protect their neighborhood

56

Theoretically, 4 plexes appreciate slower than SFHs. You sacrifice appreciation for cash flow.

57

Again we are talking about different neighborhoods. It can be like comparing SFH in Oakland with MFH in SF. Need that critical detail.

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58

Is this location worse or better than hanera’s?

https://www.redfin.com/TX/Austin/4912-Pepper-Ln-78744/home/31742217?utm_source=ios_share&utm_medium=share&utm_campaign=copy_link&utm_nooverride=1&utm_content=link

https://www.redfin.com/TX/Austin/815-W-Mary-St-78704/home/31679059?utm_source=ios_share&utm_medium=share&utm_campaign=copy_link&utm_nooverride=1&utm_content=link

59

This location is better. 950k tear down, duplex

https://www.redfin.com/TX/Austin/712-W-Monroe-St-78704/home/31201639?utm_source=ios_share&utm_medium=share&utm_campaign=copy_link&utm_nooverride=1&utm_content=link

60

Yes, the multiplex is in south part of Austin, blue collar neighborhood. I will do some calculation on the SFH in the NW part of Austin today using his formula, and see which one is better.

https://www.redfin.com/TX/Austin/4912-Pepper-Ln-78744/home/31742217

Here is his calculation sheet.

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2 Likes
61

See, I was right :joy:

You can’t blindly trust an agent, you are the best to watch for yourself

1 Like