Answer: “I think for people that are starting out in general, I would recommend single family homes. The advantage of multi-unit properties is you can hopefully buy it for less money per unit than you would have to pay for a single-family home. For instance, you might buy a single family house with two bedrooms for 50 thousand dollars. However, you might hope to buy a two bedroom in a multi-family unit for 35 or 40 thousand a piece.”
The rent is a little less per unit than a single-family home would be per unit. The management and expenses are generally a little higher in a multi-family than a single-family home.

But the biggest problem is that a multi-family property is much harder to sell than a single-family home. For single family homes, you two types of buyers. You’ve got other investors like you. You’ve also got retail or owner financed buyers who might want to live in the house.

Retail buyers usually don’t buy multi-unit properties, at least here in Oklahoma City. Not even duplexes.

When you talk about selling a mult-family property you’re only talking about other investors. And the management is a little more complicated for a mult-unit property than a single family home. One factor is that you’ve got some common utilities. You may also have some common land to keep up with and you may be forced to play referee between your tenants.

Can you make some good money? Absolutely. I don’t think apartment complexes, especially in Oklahoma City are the huge money maker because you’ve got investors on a national basis who are also buying those properties, whereas they don’t compete much with mult-unit properties of 4 units or less or single family homes.

Recently, I saw an 16-unit apartment complex in what I thought was a pretty crappy neighborhood. I thought it might go for $200,000 to $250,000. By the time the dust finally settled, it sold for $475,000 to an out-of state investor.

In my opinion, the investor who bought that property isn’t going to make that much on cash flow. In my opinion, they’ll have to hold that property for a long time to make the investment carry it’s weight.

That’s why most of what I buy are single family homes. That’s also what we highly recommend for beginning investors.

For some great insights into getting started investing in single family homes, CLICK HERE to check out this special report I put together for you.