One of my financial regrets was not buying a multifamily investment property in my late 20s. Instead of taking advantage of multifamily investment opportunities to generate more passive income, I decided to buy a four bedroom, three and a half bathroom single family home and live larger instead.
The house wasn’t huge at ~2,300 sqft. But it was too big for my girlfriend and I at the time. Two bedrooms and two bathrooms were hardly ever used. Not only was there so much wasted space, the house was a suboptimal use of $1.52 million. Taking on a $1,216,000 mortgage that cost $6,200 a month was a lot and sometimes stressful.
In retrospect, a better choice would have been to buy a two-unit building for a similar price. Each unit would consist of two-bedrooms and one and a half bathrooms around 1,350 sqft each. My girlfriend and I would live in one unit and rent out the other unit for at least $4,000 a month.
Not only would our living costs have been so much lower for more than a decade, our passive income today would be at least $2,000 a month higher. Investing in multifamily investment properties is a better bet when you are young and don’t have children.
With increasing anticipation of a strong recovery in 2021 thanks to a bevy of upcoming vaccines, it’s worth getting smart on the best multifamily investment opportunities post-pandemic. The value of cash flow has gone way up because interest rates have come way down.
I’ve invited CrowdStreet, my favorite real estate crowdfunding platform for accredited investors and Financial Samurai sponsor, to educate us on three types of multifamily properties they think are the most promising.