Single Family vs Multifamily Real Estate Investing

It’s simple… you don’t want to manage tenants, fix toilets, mow the lawn, and do a lot of other work on what is supposedly a “passive” investment. Having a Single Family rental unit is basically like having a constant part time job.

It goes without saying that investing in Real Estate in general has tremendous benefits, namely in appreciation, cash flow, tax benefits, and much more. Our target is to reap as many of those benefits as possible while eliminating as much of the downside as we could. Owning a single unit is almost never a good idea. You’ll be stuck relying on a single tenant, you’ll have to constantly worry about their problems, and your time commitment will outweigh a lot of benefits that you may receive. Besides the time commitment, if you factor in the maintenance costs and upkeep of the property, there are many instances where owners break even without even realizing it. 

The smarter, more efficient way to invest in real estate is by investing passively in big real estate deals, such as apartment complexes, where you have tens or even hundreds of investors, each pitching in a certain amount of money, to buy one large property rather than each buying one individual unit at a time. Those group investments where many investors pool in their money for one big property are called Real Estate Syndications. 

The benefit of buying a large property is you get huge economies of scale benefits, in more detail, you get to have the ability to hire a full time property manager on site that can take care of tenant complaints. You also can afford to hire one or in many cases (depending on the size) multiple on-site staff to take care of repairs, turn over, work orders, and many other things that you would otherwise have to do yourself if you owned single family rentals. 

Usually the way a Real Estate Syndication is made up is you have a few key members that manage the property called sponsors, and you have many passive investors that pitch in their money to own a part of the property being purchased. You get to participate in the asset and benefit from Real Estate appreciation, you will also receive monthly or quarterly cash flow distribution from the rent being paid, and to top it all off you’ll receive huge tax benefits and credits that will significantly lower your payable tax on any profits (speak to a CPA). 

If you are possibly interested in the future in looking at available real estate syndication deals, sign up on our investor platform and we will send you investment opportunities alongside other investors.

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