Has anyone purchased multiunit rentals in low cost area like the Midwest or the south?
I used to own a few in the south, although it wasn't in a low cost area.
It would be more accurate for me to say lower cost, compared to California, where one could reasonably expect solid cash flow along with some appreciation.
Meh, cap rates in Atlanta are under 4% and a decent multi in a nice part of town will cost you $1mm+. The grass isn't always greener. You'd be better off buying in rural california.
Yes. Prefer SFH though. High cap rate but high risk for repairs and issues, high management overhead, plus exposure per asset is much higher compared to buying SFH.
What is the cap rate your seeing for SFH and what general area do you own properties?
Multi family is OK if you only wants to keep collecting rent for ever and pass down to your kids. They are not able to mortgage the same so it will never appreciate the same as SFH. And a suddenly passed rent control law can totally kill your future value like Uber collapsed the Taxi Medallion market.
Small multis (<5 units) can mortgage the same.
I’m not sure why the nuance between a mortgage (1-4 units) and a commercial loan (5+ units) matters.
Yep. I've got multis in the south
What was your process for researching potential properties to purchase? How did you select locations?
First thing was getting on biggerpockets and learning about the reputation areas had. Then finding an agent that specialized in working with investors and doing some visits.