Entry Level Investment Strategy

Multi Family Duplex, Triplex, Fourplex rentals..

Even though this is multi family real estate it is still considered a residential asset as they are 4 units or less. Rental Units 5+ is considered commercial. The difference is residential assets have lower property taxes and you can obtain favorable residential mortgage rates and higher LTV "loan to value" loans. You can still have your traditional 20% down with these type of assets. Determining value would normally be the residential route using comparables of similar properties. This is the same as any other rental but having more tenants in separate units under one roof. The term "economy of scale" has been used widely with multi family assets vs single family comparing maintenance of multifamily under 1 roof vs multiple single family roofs. Also scheduling maintenance is more convenient having to go to 2 units in one address vs 2 separate addresses. This is also a great way to "House Hack" live in one unit and let the rest of the tenants pay for your mortgage and expenses and possibly cash flow. Even have a long term tenant and one unit and short term AirBnB in the other to hedge your risk.